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COPYRIGHT DEPOSre 



PRACTICAL TALKS 
ON CONTRACTING 



BEING REPRINTS FROM 
THE CONTRACTOR 
OF VALUABLE PAPERS 



BY 



FRANK B. GILBRETH 
C. A. W O R D E N 
A. O. DAVISON 
and E. S. HANSON 



PUBLISHED BY 

THE CONTRACTOR PUBLISHING COMPANY 

MONADNOCK BLOCK, CHICAGO 

1910 






CONTENTS 

Page 
Systematizing a Contractor's Office . By Frank B. Gilhreth 3 

Organization — How to Effect and Maintain It. 

By A. O. Davison 10 

Between Profit and Loss By E. S. Hanson 20 

Office System for Construction Work . . By A. O. Davison 50 

Liability Insurance for Contractors . By C. Arthur Worden 76 

Important Things to Consider in Estimating. By A. O. Davison 81 

Purchasing Records for Contractors . By C. Arthur Worden 93 

Tool and Equipment Records . . . . By C. Arthur Worden 102 

Contractor's Daily Reporting System . By C. Arthur Worden 106 

Earthwork Records By C. Arthur Worden 110 

The Operation of Camps and Commissaries. By A. O. Davison 113 

How Contractors Use Photography . . . By E. S. Hanson 122 



Copyright 1910 
By E. H. Baumgartner 






PRACTICAL TALKS ON 
CONTRACTING 



SYSTEMATIZING A CONTEACTOR'S OFFICE.* 

BY FRANK B. GILBRETH. 

IN THIS paper I have endeavored to give a description of 
the lessons that we learned during the years of evolution 
of the present system in our office. Systematizing a de- 
partment, an office, or a business, is accomplished by one, or 
both, of the two following methods: (1) By efforts of the 
members of the organization, (2) By efforts of professional 
systematizers. 

For the original idea of system in our office, I desire to 
acknowledge my indebtedness to my friend, the late Wm. H. 
McElwain, the possessor of one of the master commercial 
minds of America. The success of his whole tremendous busi- 
ness was, to use the words of his own statement to me, "Due 
to having his entire system in writing." Mr. McElwain's 
further advice was to carry the systematization of our busi- 
ness as far as possible by our own efforts before calling in the 
professional systematizer — that is, to use both methods sug- 
gested above in the order given. After a system has been put 
in writing and perfected along simple lines by the men who 
have built up the business, it is easy for the professional sys- 
tematizer to understand instantly the methods in use at the 
time he undertakes his task. He can then suggest changes 
and improvements, which can be adopted with no shock to 
the business. 



*Paper read at Third Biennial Meeting of the American Public 
Works Association. 



4 Practical Talks on Contracting 

When experts attempt to install system for a concern that 
has not been systematized by its own organization, a shock 
is bound to occur. If it is desired to introduce expert advice 
before any attempt is made to systematize by the organization 
itself, there is no such protection against shock as to take the 
precaution of carrying on the old system at the same time 
that the new system is being installed and tried out. Keep 
the old system in a separate building, if necessary, but keep it 
in operation until the new system has proved itself, by actual 
use, to be superior to the old. The expense of temporarily 
maintaining a duplicate accounting department, for example, 
is very little compared with the protection, speed, order, 
rivalry and value of actual comparison. 

As a result of our own experience, we believe that the best 
way to systematize a contractor's business is along the lines 
suggested by Mr. McElwain. We believe that the funda- 
mental laws governing systematization are clearly defined. 
They can be used and adapted to any line of business by the 
men in that business. 

The procedure in systematizing by the evolution method is 
as follows : 

(1) Have each member of the office put in writing a de- 
scription of the way he actually does his work. Not at first 
of the ideal way that the work should be done, but of the real 
way, the way in daily use. If an attempt is made at first to 
write down the ideal way, the entire benefit of the scheme 
will be lost. The rules must be historical, descriptive and no 
nearer perfect that are the members of the organization. The 
rules must be in such form that they can and will be obeyed 
without having perfect human beings to fill each position. 
These written descriptions should be put in the form of rules 
for the next clerk below, who needs description, instructions 
and guidance as to the work he is eventually to do. 

(2) After each member of the organization has submit- 
ted his rules describing the way he actually does each part of 
his work, have the entire collection typewritten. A complete 



Systematizing an Office 5 

copy should be handed to the head of each department for 
correction and improvement. The corrected copies should be 
then inspected by the general manager. 

(3) During the various inspections of the rules, it will 
usually develop that some members of the organization have 
not been able to express their ideas well. It will also de- 
velop that some one clerk has a talent for wording rules par- 
ticularly well. Select this clerk to revise and arrange in 
proper order the entire collection of rules. If an announce- 
ment is made at the time the rules are first written that the 
clerk submitting the best set of descriptive rules will be made 
"System Clerk/' better offerings from all employes will result, 
and a higher standard will be secured. The system clerk 
should see that each rule describes the easiest way to accom- 
plish the act that it describes. Few people realize that a 
simple system that can be enforced easily is much better than 
an ideal system that is difficult to enforce. Only simple sys- 
tem is good system. Have the rules expressed in the simplest, 
most concise manner possible. 

(4) Have the revised rules typewritten again, and give 
a complete copy to each member of the office force. Also dis- 
tribute notices of prizes that will be given to those who sug- 
gest improvements that are adopted. We have found that $1 
for each suggestion adopted, and three special prizes of $2, 
$3 and $5 each for the best suggestions during the month 
will bring in many improvements. Clerks will use every ef- 
fort to discover improvements not only for the prizes, but also 
for the promotion that always rewards a clerk who can con- 
stantly suggest better ways of doing work. 

Our experience proves that immediately after all' of the 
clerks have received a complete copy of all the rules governing 
all other departments as well as their own all hands will dis- 
cover and suggest eliminating mles requiring unnecessary 
labor. Suggestions for improvements will then come thick 
and fast. The $6 boy will understand the work of the $12 
boy. He will consider himself lucky to fill the place of the 



6 Practical Talks on Contracting 

$12 boy above him for $9. The $12 boy will be able to do 
the work of the young man who is getting $24 per week. It 
means a raise of pay and more earning power for every mem- 
ber of the office organization. This process will extend up to 
the heads of departments, who can spend their time more 
profitably on new work that requires judgment, leaving routine 
work to be handled by the clerks under them. 

Too much stress cannot be laid upon the importance of re- 
ceiving, rewarding and incorporating suggestions from any 
and all members of the organization. It encourages all clerks 
not only to make the best use possible of their own experience, 
but also to investigate what is going on in other organizations 
and to read magazines of "Short Cuts" in business. This 
reading brings the organization into sympathy with the best 
work of system experts and labor saving devices, and paves 
the way for the successful entry of the professional sys- 
tematizer into the office. Such reading of short cuts and im- 
proved business methods also stimulates the interest in "Mo- 
tion Study." 

This "Motion Study" is an object of particular interest to 
us, and is put into practice by us on all of our work, both 
office and field. It consists of observing and noting the mo- 
tions used to do any piece of work, of eliminating the un- 
necessary motions, determining how the work may be done 
with the least possible number of motions, and, finally, of 
reducing the necessary motions to the shortest possible dis- 
tance in feet and inches. 

In the office this study involves the discovery of the form, 
methods, etc., that will save motions of each and every clerk. 
In our office we make use of every device that we know of to 
save motions. For example: 

(1) "Eye saving^' devices. 

(a) Different forms, especially manifold sheets, made of 
different colored paper, the color showing to which special 
destination each copy of the form is to be sent. It is ob- 



Systematizing an Office 7 

viously quicker to collect or file, sa}^, all the blue copies than 
to read the destination directions on each sheet. 

(b) Distinguishing numbers or initials on the lower cor- 
ner for T. L. (tool list), U. C. E. (unit cost report), to save 
reading of the entire forms. 

(c) On all typewritten letters a list of articles to be en- 
closed or sent under separate cover is placed at the lower left 
hand corner. This makes it needless for the mail clerk to read 
the entire letter to see what is to be enclosed. 

(2) "Hand saving^' devices. 

(a) Printing on forms all wording that is in continual 
use to save pen motions. 

(b) Several phrases or sentences on such forms as tele- 
phone blanks, etc., all but one of which may be crossed out 
when form is used. 

(c) General use of self-inking rubber stamps. These 
save the motions of inking on a pad. The place for the 
thumb is cut off flat to save the motions of turning the stamp 
right side up, as well as to save taking the eyes off the work. 
It is attached to a weight that will carry it back into place 
when it is not in use. 

(3) "Foot saving" devices. 

(a) Placing all files and furniture so as to have the 
shortest possible distance, measured in feet and inches, for 
the travel of the clerk who uses them. 

(b) A definite place for every piece of paper that is 
handled in the office, both before and after it is filed. 

(4) "Memory saving'^ devices. 

(a) Each file plainly labeled. 

(b) All similar files labeled in the same sequence. 

(c) Daily calendar made out ahead, an automatic mem- 
ory of date of events, etc. 

These are only a few of the many examples that might be 
cited. 

It is impossible to go farther into detail in this paper. In 
our business the written system for the office work has grown 



8 Practical Talks on Contracting 

into systems for the various departments. For work in the 
field, the written system has evolved into a field system, a con- 
crete system, a bricklaying system, etc. 

The general benefits that are sure to come from this evolu- 
tional form of system are: 

( 1 ) There is no general upheaval, nor the slightest shock 
to the business. The installation of the system has cost noth- 
ing. 

(3) All members of the organization are working under- 
standingly toward the same desired end. 

(3) A corps trained on the duplicate plan system is 
evolved simultaneously with the system. 

(4) Clerks can be instantly shifted to accommodate the 
business, for vacations, illness, promotion, and immediate de- 
mands of any or all departments and to sudden increase of 
business. 

(5) From its beginning the system will be popular with 
the clerks. Every one of them profits by it. It reduces their 
labor. It fits them for constant promotion, and gives them 
continued opportunity to win prizes. It provides places for 
the advancing young man, also for the faithful routinist. 

(6) Competitive spirit is always active, yet "team work" 
is assured. 

(7) The resulting system is exactly suited to the particu- 
lar ofiice in which it is evolved, as it is the outgrowth of that 
office and its particular requirements. 

(8) Growth is an integral part of the conception, and 
therefore the system will be elastic and adapted to great fluc- 
tuations in the amount of business in hand. 

After the evolutional system has been installed and is suc- 
cessful, it is time to call in the professional systematizer. 
There is hardly a business that is not large enough to warrant 
the advice of a system expert. This expert, having made 
system a life study, will surely be able to bring from his ex- 
perience and observations behind the scenes of the inside 
workings of fifty offices some points that will be of great 



Systematizing an Office 9 

value to the fifty-first. He will find in that office an organi- 
zation to appreciate his study, and on the alert to receive 
his suggestions. His improvements will correct and improve 
the growing system with no resulting check to the growth. 

There are three obstacles which the man who undertakes 
to systematize his office must overcome. 

The first obstacle is the fear one naturally has of being 
called theoretical instead of practical, of being called "a 
dreamer^^ instead of '^a doer." When it is realized that that 
man can manage the details of his work by putting in writing 
a description of the simplest and the swiftest routine best 
fitted to handle large undertakings in a business-like way, all 
such criticism will die. 

The second is, thinking that his system can ever be com- 
plete. By its very nature the system of a growing business is 
a growing thing. It must be constantly adapted, constantly 
increased, constantly improved. 

The third obstacle is so-called "red tape,'^ and the fear of 
it. No good system is ever "red tape." In fact "red tape" is 
simply bad system, system that has never been tackled by all 
the individuals of a loyal and interested organization deter- 
mined to answer the following questions: 

( 1 ) How can we simplify ? 

(2) How can we eliminate ? 

( 3 ) How can we condense ? 

The whole secret of success is in a constant endeavor to 
answer these questions. This constant attention can be given 
only by the organization itself. 



10 Practical Talks on Contracting 



ORGANIZATION— HOW TO EFFECT AND MAIN- 
TAIN IT. 

BY A. 0. DAVISON. 

IN THIS day and age of keen competition and gigantic un- 
dertakings, to be thoroughly successful, any and all lines 
of business must be based on proper organization. In 
the rapid march of progress the time has passed when one man 
can own and operate a business of the proportions necessary 
to keep abreast of the times and attend to all of the necessary 
details thereof himself. It is, therefore, necessary for the 
owner or owners to surround themselves with competent men, 
particularly adapted to that part of the business which it is 
necessary to entrust to their care. 

One of the best examples of organization today is to be 
found in our modern circus managements. On account of the 
almost daily handling and transportation, installing and dis- 
mantling of the enormous properties and paraphernalia of a 
large aggregation of this kind, which is equal almost to the 
entire makeup of a small-sized city, it is necessary to have a 
large and capable force of executive men to handle such an 
outfit with economy and dispatch. The established mercan- 
tile or manufacturing businesses, of course, require compe- 
tent and experienced heads in all departments; but by reason 
of this class of business being permanently located, the men 
in executive positions have more time for consideration, and 
as their plans can be more carefully worked out the require- 
ments are vastly different. 

Next, perhaps, to the management and manipulation of 
circus enterprises the management and handling of construc- 
tion work requires men of sounder judgment and better re- 
sources than in any other line of occupation. 

The Head: To start with, a successful contractor himself 



Organization 11 

should be a man of strong determination, sound judgment and 
one well able to control himself in cases of extreme emergency, 
and resourceful to the last ditch. There is no line of work in 
which there are so many elements of risk as that which con- 
tinually confronts the contractor. This fact is illustrated 
in almost every contract after actual operations are begun. 
Where there is foundation work to be done the nature of the 
excavations are, as a rule, shown by borings; but it is very 
frequently the case that conditions have to be contended with 
that are entirely foreign to such borings. 

Contractor Moist Be Resourceful. 

Then the contractor has things to contend with which are 
undoubtedly not included in the figures from which his esti- 
mates were prepared, and, consequently, he should be able to 
cope with such conditions and be resourceful enough to pro- 
vide ways and means for so doing, which will keep his ex- 
penses within or near the estimates made. In the case of 
river work he has the elements to contend with, which cannot 
be calculated and figured in his estimate, except in a general 
way, and his resources are again taxed to keep his operating 
expenses down to the minimum. 

General Manager: A man for the position of general 
manager on construction work should be selected for his ex- 
ecutive ability, experience, and his powers of organization. 
He should, like the contractor himself, be a man of strong de- 
termination and of great resources. He should be capable of 
the entire management of the business from an operation 
standpoint, and through him the owner or head of the con- 
cern should handle and control the work in all its branches. 
To the man in this position should be given authority to make 
all purchases, draw up all contracts for materials, hire all 
heads of subordinate departments, and in fact, he should be 
vested with the authority to handle and operate the work in 
all its branches. It should be the duty of his office to see that 
all materials and supplies are ordered at the proper time and 



12 



Practical Talks on Contracting 



delivered on the work where and when needed in order that 
no delays may arise from the absence of materials and sup- 
plies for the proper and economical handling of the work. It 
should also be the duty of the general manager to take up all 




Plan for Organizing a Contractor's Forces. 

matters with the head of the concern which require the atten- 
tion of that department. 

The man in this position should be very diplomatic. It is 
so often the case that jobs of construction work are located in 
out-of-the-way places and, as a rule, it will be the only time 
during the lifetime of the residents that anything outside of 
the usual course of their occupations will occur in their im- 
mediate vicinity. They, as a rule, do not take into considera- 
tion any future good results which may be derived from the 
work being done in their vicinity, but their only thought seems 



Organization 13 

to be "How much money can we get out of the contractor?" 
The price asked for any right-of-way privileges and conces- 
sions of any description are usually about four or five times 
more than should be asked. The man having charge of mak- 
ing contracts, securing privileges, concessions, etc., should be 
a man able to exercise a great deal of diplomacy, and if he is 
not there is usually far too much money expended on matters 
of this kind. 

Engineering Department : The man in charge of this de- 
partment of the work should be selected for his ability and 
judgment in matters pertaining to this department. The du- 
ties of this department should consist of making complete 
and detailed estimates of new work, drawing plans, if such 
are required, and all work pertaining to a department of this 
kind in connection with the making of such estimates. After 
quantities have been figured and all necessary data taken from 
plans and specifications by the engineering department, these 
figures should be turned over to the general manager and 
prices secured by his department on all materials required to 
enable him to make his estimates intelligently. During the 
progress of the work the duties of the engineering department 
should be the giving of lines and levels on the job and fur- 
nishing of plans and details from which the men are to work. 
They should also take all cross sections, figure quantities of 
work accomplished, making weekly reports of progress and 
carefully checking all monthly estimates allowed. This de- 
partment should be furnished with such assistance as is re- 
quired to keep this part of the work completely up to date 
at all times. 

Office: The man for this department should be selected 
for his ability as an accountant and for his knowledge of the 
proper distribution of expenses. To this department belongs 
the ordering and checking of all material and supplies, the 
keeping of time, making of payrolls and paying of same. As 
stated above, the ordering of materials and supplies is a duty 
belonging to the general manager's office; but for the benefit 



14 Practical Talks on Contracting 

of the proper records, these orders should be referred to the 
office and requisitions for same should originate in that 
department. It should also be the duty of the office to suppl}^ 
the general manager's office with daily and weekly reports of 
expenses, to be used by him in connection with the progress 
reports furnished by the engineering department to keep him 
in constant touch with the actual progress of the work. It is 
also the duty of the office to keep proper detailed distributions 
of all labor, material and supply accounts arranged in such 
form that actual expenses in connection with any portion of 
the work can be definitely arrived at any time. 

General Foreman: The general foreman, local superinten- 
dent, or (as he is generally called) "walking boss," should be 
selected for his ability and experience in the management of 
men, handling of various classes of operations and his execu- 
tion. This man should be closely allied with the engineering 
department and office. All plans and details for the proper 
laying out of the work should be furnished him by the engi- 
neering department as needed. He should also be kept in- 
formed by the engineering department in detail of the 
progress he is making and also be furnished by the office with 
a complete detail of expenses incurred so that he can at any 
time, when advisable, make a rearrangement if the work is not 
progressing as it should. To this department should belong 
the authority for hiring and discharging gang foremen under 
him and also the final decision as to the hiring and discharg- 
ing of men under his different foremen. 

The general foreman should also be a man possessed of a 
good amount of diplomacy. It is his duty to consult with the 
resident engineers, inspectors and superintendents for the 
builder, as there are vastly different ideas as to the times when 
certain operations should be commenced and also as to the 
manner in which different things should be accomplished. It 
requires a considerable amount of diplomacy on the part of 
the man directly in charge of the field operations to secure the 
best results for his employers. It is often the case that the 



Organization IS 

man in charge for the builder is not a thoroughly competent 
man in the position, and when this is the case, he is more apt 
to make objections to the methods employed by reason of the 
fact that, not being thoroughly competent, he is afraid at all 
times that something will be done which will reflect on his 
ability and position. A diplomatic general foreman will soon 
find the best way in which to handle the party or foremen 
and will consult with them at the proper times and in the 
best manner to avoid any controversy and friction on the 
work and in this way produce the best results for all parties 
concerned. 

Foremen: The securing of men for the positions of fore- 
men should be based on the knowledge of the work for which 
they are employed, and their ability to handle machinery and 
men. They should be men of fair education, capable of read- 
ing plans and making intelligent daily reports covering the 
distribution of time of men under them and of quantities of 
work accomplished. 

The Men: The mechanics and laborers on a job should 
be hired with a view to securing the most competent men ob- 
tainable for the positions which they are required to fill. In 
many cases, however, it is advisable to hire men of the right 
class and train them for the positions for which they are need- 
ed. The results, however, obtained from the men is due 
almost entirely to the ability of the foremen and the general 
foreman. The only requirements in the hiring of men to effect 
a proper organization is to secure steady, sober men and, in 
the case of mechanics, ones who are fitted for the work which 
they are expected to accomplish. 

Uniform Wage Scale Should Be Maintained. 

In the hiring of men there should be a standard scale of 
wages in use, governed by the local conditions, location and 
class of employes required. There should be a fixed rate for 
common labor and a fixed rate for different classes of mechan- 
ics, and these rates should be strictly adhered to. Instead of 



16 Practical Talks on Contracting 

changing the rate to fit one class of laborer or mechanic em- 
ployed, the rate should stand and men should be employed 
who are capable of earning the rate of wages specified in the 
schedule. It is a very serious mistake to employ a large 
number of men, all working together, and pay one man a 
higher rate of wages for the same class of work, and another 
man, who is working with him constantly, a lower rate. It is 
but a question of a short time until all the men on a job are 
familiar with the wages of their fellow employes and, where 
there are different rates paid for the same work, it creates dis- 
satisfaction and demoralizes the force. Have your fixed rate, 
hire your men at this rate, and if they do not come up to the 
standard, discharge them and hire others who do. 

In the hiring of heads of departments, local superinten- 
dents, etc., men can usually be secured for such positions with 
very good results by basing such employment on past experi- 
ence and the personality of the men ; but when it comes to the 
employment of gang foremen it is a more difficult problem to 
secure men who are thoroughly experienced in their particular 
line, sober and reliable, and ones who will work at all times to 
the interest of the management rather than to the interest of 
the men under them. It is, of course, not intended that the 
foremen should take any undue advantage of the workmen to 
further the interest of the management, but he should, first 
of all, have the interest of his employer at heart and he should 
be a person who is capable of controlling and handling his 
men in a manner that will produce the best results. It is often 
necessary to replace men for positions of this kind a number 
of times before the one possessing all the requirements neces- 
sary to constitute a competent man is secured. 

In the case of the workmen themselves, there is probably 
no line of business in which it is necessary to secure help from 
such a floating element of men as is necessary in construction 
work. However, if the superintendent is a man of good Judg- 
ment, as well as his foremen under him, the problem of secur- 
ing the proper class of men is minimized, it being only neces- 



Organization 17 

sary to be on the alert for men properly fitted for that part 
of the work on which it is intended to use them, and above all 
to endeavor to secure men who are not constant or periodical 
"boozers" and ones who are not agitators. It is sometimes 
necessary to overload the gangs somewhat at the start and, by 
careful observation for a few days, quietly weed out the unde- 
sirables. In this way, in a short time, a gang of the greatest 
efficiency can be secured, and, if managed by a competent 
foreman, their efficiency can be kept up to the standard. In 
order, however, that the best results may be obtained it is 
necessar}% through the proper channels, to have every man, 
from the general manager down, feel that he is an important 
and very necessary addition to the organization and that it is 
the management's desire to retain him as a permanent fixture 
in such organization. It is not meant by this that any man, 
no matter what his position may be, should be led to believe 
that the organization would be crippled by his retirement from 
it ; for, in most cases, when an idea of this kind is well formed 
in a man's mind it crowds out his real efficiency and he be- 
comes "dead wood," and he should be promptly removed and 
replaced by a man who has brains enough to know that there 
never has been any position occupied by a man that could not 
be as well or better filled by some one else. It should, how- 
ever, be borne in mind that it is the duty of the management 
to show the proper appreciation of the efforts of the men in 
every capacity, and, if the proper methods are employed along 
these lines, the efficiency all down the line can be constantly 
increased and maintained. 

If there are any grievances, real or imaginary, they should 
be taken up through the proper channels and given the consid- 
eration they deserve and the man or men making the claims 
should be consulted and satisfied that his or their claims have 
been fully looked into. If there is a foundation for such com- 
plaint the trouble should be remedied promptly, if found to be 
beneficial to the work to do so. If the complaints are without 
foundation the party making them should be advised that such 



18 Practical Talks on Contracting 

is the case, and if he cannot be thoroughly satisfied that his 
troubles are imaginary he should be quietly and speedily 
dropped out and his place filled by some one who is not likely 
to be a disturbing element. 

The Matter of Complaints. 

All complaints, suggestions and recommendations should 
be made through the proper channels. If the men themselves 
have any matters to take up they should do it directly through 
their foreman and if the matter is of such a nature that it is 
not possible for him to decide it definitely he should then put 
it up to the general foreman, who, if unable to make a deci- 
sion, should carry it to the general manager, and so on until 
it has reached the department in which it can be finally and 
definitely decided. 

The workmen themselves should be directly responsible in 
all things to the foreman under whom they are working. The 
general foreman should not, at any time, issue his instructions 
directly to the men, but should issue them through the fore- 
men. The general manager should not issue his instructions 
to the foremen, but should do so through the general foreman 
and through him the instructions should go to the foremen 
when necessary. 

Matters with the engineering department and office per- 
taining to the outside should be taken up by them with the 
general foreman and through him conveyed to his foremen 
when it is necessary that this be done. 

In order that the greatest efficiency can be attained and 
maintained all departments should co-operate in all things 
and no departments should exceed their authority by taking 
matters up with departments who come directly under the 
jurisdiction of an intermediate department. 

All departments, including the foremen, general foreman, 
engineering department, office, and general manager (when 
he is located so as to make it practical) should meet in conven- 
tion at regular intervals and discuss ways and means, thor- 



Organization 19 

oughly digest past performances, profit by showings of prog- 
ress and expenses, arrange schedules for future progress, out- 
line plans as far in advance as practical and generally have 
every one in the organization kept at all times thoroughly 
posted as to the actual progress being made and what future 
progress is necessary to be made to make the work a success. 
Every man who has acquitted himself creditably, from the 
lowest position to the highest, should be given to understand 
that his efforts are appreciated and any who has not filled all 
requirements should be informed of his shortcomings and 
given an opportunity to bring his department of the work up 
to the standard. 

Every department when thoroughly organized and run- 
ning smoothly should be maintained, as far as possible, and 
this can only be done by proper treatment of every one 
concerned, thereby creating a desire to excel; and so long as 
a contractor keeps himself surrounded with an organization 
of this kind, wherein there is a feeling in each individual that 
he is a part of the machine, there is very little chance that 
such a contractor will not be a success. 



20 Practical Talks on Contracting 



BETWEEN PEOFIT AND LOSS. 

BY E. S. HANSON. 

AN OVEE- ABUNDANCE of red tape in the contracting 
^A business is an abomination, but the man who tries to 
"^ -^ do away with it entirely is simply making overtures to 
bankruptcy. Unless, of course, he be an individual of much 
more than ordinary capabilities. There are contractors, it 
is said, who can walk down the survey of a line of railroad, 
noting a stake here and making a mental calculation there, 
and tell you as they go along how much the Avork of construc- 
tion will cost. More than likely they will get the job, too — 
and make money on it. 

But the practice is not one to be encouraged. In fact, 
few men could do it. Others would either make a price so 
high as to give the work to their competitors, or so low as 
to ruin themselves — putting them out of the game in either 
case. The quality of mind to do this successfully is abnor- 
mal — like the ability which a few men possess of passing 
hurriedly down a long line of box cars and afterward writing 
down correctly the number of each car in its proper order. 

But for the most part the contractor is a normal man — 
strong, well rounded, well disciplined. He cannot ordinarily 
do things by a stroke of genius, but he can accomplish won- 
ders by careful thought and hard work, which is infinitely 
better. He is determined to accomplish things — for it is only 
by "something attempted, something done,'' that he manages 
to keep his bank account in a healthy condition. On this 
account he is apt to balk at red tape. Tt appeals to him as 
mere bunches of ribbon for the idle and the frivolous. He 
insists on production as the main thing — as almost the only 
thing — even though its results are sometimes largely dissi- 
pated because of a lack of red tape to properly bind them 
together. 



Profit and Loss 21 

Didn't Preserve the Data. 

For instance: The contractor is called upon to estimate 
on a piece of railroad construction in Missouri. He runs 
over the profile and specifications and sees that the work 
includes features similar to work he did in West Virginia 
a number of years ago^ on which he lost a large sum of 
money. He can tell you the exact amount by referring to 
his books^ for the fact was apparently of large importance 
in his business. Yet in reality it was not half so important 
as other things of which he has kept no record. He has 
nothing which will tell him the price per yard he bid on 
the work, and no data from which he can compute what the 
work actually cost him. These things would be of inesti- 
mable value to him now. He knows in a general way, of 
course, what it was that made the work so expensive before, 
and he will no doubt make a safer bid than he did then, but 
in the absence of definite data on the work he may place his 
"factor of safety'^ so large as to make him the high bidder 
and give the job to the other fellow. 

Suppose, however, that he has preserved the bare state- 
ment that the work cost him 22 cents per yard, whereas his 
bid was 19 cents. He is little better off. For he has no rec- 
ord of the conditions under which the work was done. Were 
wages high or low at the time? Was the work hindered by 
inability to get men ? What equipment was used in doing the 
job? Was it more, or less, efficient than the equipment I have 
to work with now? These are some of the things that the 
contractor would give a good deal to have at his finger ends 
just now, but his abhorrence of red tape has caused him to 
neglect the collection of any such valuable data. 

As a mathematical problem, then, he cannot figure out to 
a certainty whether 22 cents is the proper price to ask at the 
present time or not. Of course, with this in mind, and a 
knowledge of general conditions, he will be able to arrive at a 
figure which he feels justified in putting in as a bid, but it 



22 Practical Talks on Contracting 

will not have about it the certainty of being built on definite 
knowledge which it might otherwise have. 

Men Must Make Good. 

The writer of these somewhat rambling remarks stood one 
morning in a contractor's shanty and watched the "boss" send- 
ing the various gangs out to work, distributing tools, explo- 
sives and other requisites among them with seeming disregard 
of their value. He would probably explain his action by say- 
ing that he had confidence in the men, but this lack-of-system 
way of doing things is not calculated to give the men confi- 
dence in him. 

Men must be made to feel responsibility, and this, aside 
from the value of the data collected, is one of the valuable re- 
sults of keeping detailed records of all work done. The indus- 
trial world is outgrowing the old system of setting a man to 
work at a job, allowing him to do much or little according to 
his ability or inclination, and paying him his wage without 
question at the end of the week. That is being thrown off, 
like the method creameries formerly employed of buying milk 
by the pound. In the old days "milk was milk," whether it 
was blue or yellow. Now every day's delivery goes on record, 
and it has to produce cream in order to figure in a check on 
the bank at the end of the month. 

Prices are being made too close these days to stand the 
strain of lazy and indifferent workmen. Eecords should show 
what each gang, each machine, and, so far as possible, each 
man, has done during any given day. This will act as a spur 
to the men, and will engender healthy rivalry among the fore- 
men of the different gangs. If a particular gang makes a 
poor showing during several consecutive days it means one 
of two things : either that the foreman is incompetent or that 
the gang contains several men who are lazy or otherwise unfit. 
A careful study of this particular gang for a day or two will 
usually reveal the cause of the poor showing. 

Many men will resort to a hundred and one little expedi- 



Profit and Loss 23 

ents to avoid or prolong work if the foreman is not watchful 
or is willing to "stand for" that kind of thing. And if he 
allows it to continue it will show up in the report. If the 
foreman cannot stop it he is incompetent and should give way 
to some one better fitted for the place. 

Record of a Machine's WorTc. 

The record of the work done by a piece of machinery is 
also necessary to maintain efficiency. The men who work in 
construction gangs have little thought beyond their pay en- 
velopes. So long as their pay is not dependent directly on the 
output of a machine they care little whether it is working 
close to its maximum capacity, doing a fair and remunerative 
day^s work, or merely keeping the wheels going. The daily 
report will here work a double advantage, making the men 
give more attention to the machine^s output, and sounding a 
warning at headquarters the moment that there is a falling 
off in efficiency. This will avoid unnecessary delays, beside 
the advantage to the machine itself of making repairs just as 
soon as they become necessary. 

What Mtist a Cost System Comprise? 

Some little time ago Mr. C. E. Knoeppel wrote an article 
under the head of "Cost Reduction Through Comparison," 
for the Engineering Magazine, which goes so directly to the 
point in many matters of cost that a large part of it is here 
given. He wrote: 

"Inasmuch as the value of any system of costs is in pro- 
portion to the results obtained by it, the next question that 
suggests itself is. What must such a system accomplish in 
order that it may be pronounced successful ? This can best be 
answered by reducing any system of costs into its fundamental 
elements, as follows : 

''Cost Securing: The gathering of the many details 
through the instrumentality of shop orders, material requisi- 
tions, time cards, etc. 



24 Practical Talks on Contracting 

"Cost Compiling : The entering of the details secured upon 
forms and reports provided for the purpose. 

''Cost Comparison: The placing of the latest information 
ajid data under or beside other information and data of like 
nature. 

"Cost Analysis: The thought and deduction applied to 
the cost comparisons. 

"This will show that in order to reduce a cost it must be 
analyzed by comparison; this depends upon proper compila- 
tion, and all again depends upon accuracy in securing the 
cost data. 

"No doubt every person who reads this article will know 
of one instance, perhaps several, where a cost system had been 
devised and installed, allowed to run for a time, and finally 
thrown out on account of its failure to cut costs; the result 
being that the mere mention of the word system has about the 
same ejffect on that manufacturer as would the flaunting of a 
red flag in the eyes of a bull. In other cases systems have 
been pronounced failures but yet allowed to run on as best 
they could. A consideration, therefore, of the reasons why so 
many systems have failed to accomplish results would be next 
in order. The truth of the matter is that when systems have 
been thrown out or pronounced unsuccessful on account of 
their inability to perform their proper functions, their expen- 
siveness, or other objections, an investigation would show, in 
the majority of cases, that the man himself and not the S3^s- 
tem was to blame. This may be due to one or more of a num- 
ber of reasons, the most important one perhaps being business 
procrastination — or the inability on the part of the man to 
give more than passing attention to the points that vitally 
affect his business success; or, to put it another way, he is so 
engrossed by the consideration of details that must be at- 
tended to that the details that should be attended to are left 
to a more convenient season. In his leisure moments — if he 
has any — he may pick up a magazine that contains some valu- 
able suggestions; at his convention he listens to a paper and 



Profit and Loss 25 

discussion that appeals to him; but in his endeavor to secure 
business, to meet his obligations, to collect amounts due him, 
etc., the application of short cuts, better methods and sugges- 
tions is lost sight of for the time being. As a result, while the 
costs may be found and recorded, no practical use is made of 
the compilations. The system may be an excellent one, per- 
haps installed by a systematizer and capable of giving maxi- 
mum results; but the best cost keeper in the world will soon 
lose heart when he realizes that his work does no real good. 
It may be, owing to the inability of the management, that 
several people have something to say about the costing, and 
unless they can all agreee on a uniform policy (something 
quite unusual) the matter of using the cost compilations is 
out of the question, as the statements are bound to be mis- 
leading. 

Co-operation Necessary to Efficiency. 

"Another course which leads to disappointment with cost- 
keeping efforts is taken by some manufacturers who think that 
by putting in a few loose-leaf books, some cards with cases, 
and a few clerks to look after the records, they should obtain 
the desired results. A system in itself can do nothing, even 
with a bright clerk in charge, unless the co-operation of all 
concerned can be secured — a point oftentimes lost sight of. 
If A tells B to do a piece of work, and B is dependent upon 
C for his information, it is impossible for B to force co-oper- 
ation from C unless A has told C that the instructions of B 
are to be carried out. Another reason for the failure of a sys- 
tem to give results is sometimes found in the fact that it is 
experimented with — patched and altered every time a new 
man takes charge. It is impossible for a concern to get re- 
sults from a system radically changed from time to time, 
owing to the inability to compare items of like nature. 

"To recapitulate, the causes of failure can be classed under 
the following headings : 



26 Practical Talks on Contracting 

"The application of systems that do not cover the condi- 
tions as they should. 

"Inability on the part of the management to give the sys- 
tems and their workings the attention that they should. 

"Lack of co-operation among the heads of departments. 

"Too many changes. 

"Inefficient organization. 

"The question therefore suggests itself, How can these de- 
fects be obviated and how can the work be so handled as to 
result in maximum efficiency? After careful consideration 
I am of the opinion that the answer of this question should be 
the introduction of what may be called a 'Department of Cost 
Eeduction/ in charge of a competent man who has super- 
vision over and gives his whole time and attention to the se- 
curing, compilation, comparison and analysis of costs, along 
with such other information as affects the success or failure 
of the enterprise. Before proceeding to elaborate upon the 
possibilities of this department, it is advisable to devote a few 
words to the qualifications and the authority of the man in 
charge, and to suggestions as to where he can get his informa- 
tion, with a brief list of possible compilations. 

Department of Cost Reduction. 

"The chief qualification necessary in the man who is to 
manage this Department of Cost Reduction is the ability to 
take whatever information and data come to him and so to 
arrange and compile them as to enable him to use the data 
to advantage. Information is valuable in proportion to the 
facility of its comparison with information of a like nature, 
so that an important faculty in this man would be his ability 
to dissect the information and data he received as a surgeon 
would dissect a body, and then to reduce it in about the same 
manner as a mathematician would reduce a row of figures to 
a common denominator. Once dissected and reduced, it is an 
easy matter (provided the man in charge has some ability as a 
statistician) to draft statements that will aid in reducing 



Profit and Loss 27 

costs. The ability to compile and to analyze should be accom- 
panied by fearlessness in submitting his results; and if he is 
a gentleman in his dealings with his fellow men, the success 
of a department along the lines suggested will be productive 
of the desired ends. The truth sometimes hurts, but if made 
known in a gentlemanly manner the sting is often removed. 

"To secure maximum results the manager of this impor- 
tant department should be independent of every one with the 
exception of the president or general manager, in order that 
his suggestions and the results of his analysis may be properly 
taken care of. He should have full supervision over the com- 
piling of all the available data as well as over the methods for 
securing these data. He should have the authority to secure 
any data of special nature from any department of the busi- 
ness. He should have the right to lay the results of his inves- 
tigations before the proper persons, and to expect that these 
results will be properly considered; and lastly, it should be 
understood that while he is to have no authority over any one 
excepting the clerks who secure, compile and classify the in- 
formation he desires, his requests should be complied with; 
for in the exercise of his duties he deals with effects and re- 
sults, and he must depend upon the co-operation of all in his 
attempt to find the underlying causes — the means whereby 
costs can be reduced. If the management will give these di- 
rections, no one will attempt to antagonize the man in charge 
of this department, except one who might be afraid to have 
the results of his work known." 

Application of the System. 

From this point the author diverges into a field of no in- 
terest to the contractor, applying his system to a large manu- 
facturing business. The application can, however, be made 
by each man for himself, varying with the extent of his busi- 
ness, and the classes of work which he is doing. Not every 
contractor can have a separately organized department of cost 
reduction. In fact, there are comparatively few contracting 



28 Practical Talks on Contracting 

organizations which are large enough to make such a separate 
department necessary. 

The question, however, is not one of the machinery of 
organization, but of efficiency of management. The impor- 
tant thing is that some one shall have the time, and be charged 
with the responsibility of securing and analyzing the data 
which affect the cost of every piece of work done. In a large 
organization this can manifestly be done more efficiently by a 
department specially charged with the accomplishment of that 
particular thing; but even in a "one man" organization it 
should not be neglected. 

The old idea was that the man who went into a business 
with "main strength/' doing as nearly as possible all the 
work himself, was the man who was destined to succeed. That 
may have been true in former times, but it certainly is not so 
any more. The successful business man of the present day is 
he who reserves for himself sufficient leisure to conservatively 
estimate every job, carefully plan its execution, and then 
minutely chart the shoals of unprofitable prices, that they 
may be avoided in the future. 

A Few Things About Machinery. 

Almost every new machine which comes on to the market 
increases the possibilities of the contractor. If it is designed 
by a practical man it has about it new phases of adaptability 
which will make it a money saver. And of the vast lot of in- 
ventions which go through the patent office, few indeed of the 
impractical ones get so far as the salesroom. The market is 
controlled by practical people — men who can "size up'' a ma- 
chine and view impartially its advantages and its limitations 
with a cold eye single to its profit-bringing capabilities; and 
this quality depends entirely upon its usefulness for the pur- 
pose for which it is intended. Men who put money into the 
manufacture and marketing of a new contrivance have little 
regard for the aspirations of inventors; they are not in busi- 
ness to gratify a whim, and unless they can be satisfied that a 



Profit and Loss 29 

device fills at least to some degree the proverbial "long felt 
want/^ they will have nothing to do with it. Of course they 
occasionally misjudge the popular demand, but not often. 

It may be taken for granted, therefore, that the machines 
and devices which are on the market, especially the ones which 
are extensively and continuously advertised, have real merit 
to recommend them. The contractor can usually rely thus far 
upon the reputable manufacturer; but at this point he must 
take up the investigation for himself. He must know the par- 
ticular advantages of every piece of equipment which the 
market affords, with its peculiar adaptability to certain classes 
of work. All excavating buckets on the market may be good 
— good for something. But one make may be especially 
adapted to handling dry sand, while another will work at its 
maximum efficiency in clay, and another under water. 

The man who guards closely the line between profit and 
loss will want to know these things. The multiplication of 
labor saving machinery gives him a large field to watch, but 
it also increases his possibilities. How does it happen that 
two men, equally conservative, will often put in widely vary- 
ing bids on the same piece of work ? One has not attempted 
to get an exorbitant profit, nor has the other run too close 
to the danger line. It will, in many instances, be found to be 
simply because one man. knows just the kind of equipment 
which will do the work at least cost, and either has it or 
knows where he can get it, while the other has based his esti- 
mate on the use of a sort of general purpose equipment, 
which will do this or several other classes of work equally 
well, but which will not get down to record making on any 
of them. Perhaps the substitution of one class of hoisting 
apparatus for another, the use of a traction engine instead of 
teams to make a haul, or the correct dipper equipment of a 
steam shovel, might very materially change the complexion 
of a bid. But the man who doesn't keep himself posted on 
these things cannot take advantage of them. 



30 Practical Talks on Contracting 

Catalogues and Advertisements of Much Value. 

The manufacturer's catalogue, and the advertising pages 
of the technical and trade papers, are more than a mere bid 
for patronage. They are a part of the education of every 
man in the business. Very often they contain actual infor- 
mation which is of large value; but when nothing more, they 
act as a stimulus to inspire and a guide to direct individual 
investigation. And such investigation is coming to be more 
and more a part of the work of every successful contracting 
organization. 

Back in the time when the building of a railroad was 
almost entirely a question of men, teams and drag scrapers, 
there was little latitude for choice of means. Then the man 
who won out was he who could handle his laborers most effi- 
ciently. But the complexities and the specialization of mod- 
ern industrial methods have made the study of ways and 
means one of the chief tasks of the man who successfully car- 
ries out constructive work. 

In an organization of any size and scope, this work should 
not be allowed to rest entirely upon one individual. No one 
man knows it all. A conference will almost always bring out 
new and valuable points. Nearly every man has a field of his 
own in which he has from choice or necessity gleaned a larger 
share of information and experience. In fact, a bid on a job 
of any size and importance should never be the work of one 
man alone. Not to mention the disasters which sometimes 
occur from this course, by the overlooking of some vital item 
of cost, another member of the staff, whose experience has 
been gained at a little different angle, or whose study has been 
especially intensive in some particular direction, may be able 
to offer a suggestion which will at once change the whole plan 
of procedure. 

The ability of men along this line should, then, be one of 
the main things taken into consideration by the contractor in 
building up his staff. 



Profit and Loss 31 

A mistake is sometimes made of making an estimate on a 
pieces of work, on a basis of using a certain equipment, when 
such equipment is not in sight. The contractor will trust to 
luck to pick up the machinery at second hand in case the con- 
tract should come his way. Failing to find the kind of equip- 
ment he had in mind, he will make shift with something else 
which he happens to have; and if he were to watch his work 
closely he might discover that the money he doesn't make by 
this method would go far toward buying a new machine — so 
far, in fact, that he could get the machine, use it, sell it at sec- 
ond hand after he used it, and still have something ^^to the 
good'^ over the other method. 

A word of warning needs perhaps to be sounded here as to 
the estimate of the selHng price to be deducted from the cost 
of a machine in charging its net cost to a job. Do not figure 
too high. 

New Machine Should Be Tried Out First. 

It is an invariable rule among the best contractors that, 
no matter how much faith they have in a new device to cut 
down the cost of work, no allowance for this saving shall be 
made in the estimate until after the device has been tested and 
has "made good." In other words, the contractor puts in his 
bid as low as the most efficient of tried means will permit ; if 
the new invention proves to be a money-saver, he is that much 
ahead. But it may be, on the other hand, that some unfore- 
seen difficulty may arise in its operation, and he will be obliged 
to revert to the old system. 

There are said to be contractors who will occasionally take 
a small job at no profit, or sometimes at an actual loss, just to 
try out a new machine. This is not good business, and ought 
not to be encouraged. It tends to demoralize prices, in addi- 
tion to raising in the minds of others a distrust of the business 
acumen of the man who will do it. It is far better to watch 
the experiments of some other fellow until a convenient sea- 
son offers itself when the machine can be tried without any 



32 Practical Talks on Contracting 

sacrifice of money or prestige. Of course, some men will 
justify themselves in a course of this kind by saying that a 
small loss incurred in this way will possibly save a large loss 
later on. But it is the opinion of this writer that each job 
should be made to pay a profit, or at least no deliberate loss 
should ever be incurred. 

The estimating of depreciation in machinery, and interest 
on the money invested in it, is one place where many a man 
fails to judge correctly. 

"Ever since graduating from a technical college I have 
tried to keep a close watch on the financial part of my work, at 
first because it was absolutely necessary to husband every pen- 
ny, and later because the lessons to be learned from cost sheets 
have been most illuminating,'^ said a contractor recently in 
discussing this subject. "The habit of keeping detailed cost 
sheets on all work has enabled me to see just where an organi- 
zation or a certain class of equipment was strong or weak for 
a certain kind of work, and to change it if it was poor until 
something better was discovered, and the detailed figures have 
shown repeatedly that without making a proper allowance for 
depreciation of equipment, certain classes of contract work 
become mere gambles. 

"This is particularly true of work done under conditions 
which require a large plant that cannot possibly be kept work- 
ing all the time, as in making extensions or alterations in a 
large railway yard or in a street where traffic cannot be wholly 
kept away. I have seen work trains and the shovels supplying 
them held up for long periods in a busy yard, the delay cost- 
ing the contractor more than his profits for several days' 
steady prosecution of such work. Many people have probably 
seen expensive trench machines at work in streets on small 
jobs which could be more economically, although less rapidly, 
completed without their use. All such equipment represents 
a large initial expense and unless the contractor is able to 
estimate how much it will cost to keep it in repair and what 
it will sell for when the work is done, how is he to know very 



Profit and Loss 33 

much about his profits ? To my mind the feature of estimat- 
ing on which most contractors are weakest relates to plants 
for they do not allow for its enormous fixed charges and de- 
preciation. 

Depreciation Should Not Be Underestimated. 

"All contracts for works which are difficult to execute on 
account of complicating conditions differ greatly from those 
where all the contractor has to do is to supply a suitable num- 
ber of men and teams, work trains, a shovel or two, and some 
camps. Where it is necessary to denude a good bit of timber 
land to supply the beams and sheathing needed for difficult 
excavations, to install an electric plant for power and light- 
ing, put in compressors, derricks and drills, and to resort to 
all kinds of measures to keep the work from disturbing travel 
or injuring neighboring buildings, the bills for materials and 
equipment mount up rapidly, and it is vital in times of sharp 
competition to avoid underestimating the depreciation charges 
which should be made against such items. During the last 
year I have cleaned up two contracts for bonding companies 
on both of which I originally figured, and had the satisfaction 
of learning in each case that my estimates of the cost of the 
work were right. The unsuccessful contractors neglected in 
both cases to allow for delays with their attendant interest 
charges, for depreciation in plant, and for the increase in price 
of good labor.'' 

Each piece of the equipment of the average contractor will 
probably not be used over one-third of the time during the 
year; the fixed charges should therefore be trebled for the 
actual time of operation in order to obtain the proper amount 
to be charged against any job for this item. The fact must 
also never be lost sight of that the rapidity of invention is 
likely at any time to render obsolete many a piece of other- 
wise good equipment. If, for instance, your equipment does 
a certain class of work at 16 cents a yard, and a new device 
is put on the market which will accomplish the same result 



34 Practical Talks on Contracting 

for 8 cents, with no greater initial cost, and with increased 
ease of handling, your machine is manifestly a likely candi- 
date for the scrap pile, even though you bought it but yes- 
terday. This makes it sometimes advisable for a contractor 
to rent a machine for which he has only widely scattered use. 
But as a general proposition he should own his own plant ; for 
if the man who rents machinery to others can make money at 
the business, the contractor should have the advantage of this 
profit for himself. 

Knowing Where to Get What You Want. 

T^ext to knowing what material and equipment to buy for 
any given class of work, the contractor, or some member of his 
organization, must know how, when, where and at what price 
all these things should be bought. The successful buyer — 
the man who has his finger on the market, who knows what 
goods are worth, where they can be secured, and gets them a 
little below his competitor — is the man who is in demand in 
mercantile lines. And he should be just as valuable in con- 
structive and engineering work. The contractor is buying to 
sell again at a profit, just as really as though he turned the 
machine or material directly over to his client. If a machine 
is entirely worn out on a certain job, the amount apportioned 
to machinery must be sufficient to cover its cost, plus at least 
10 per cent for profit on the transaction. This latter is some- 
thing which is sometimes not taken into account. The con- 
tractor acts as a purchasing agent for his client, and is enti- 
tled to a commisison on purchases made, just as much as he 
is entitled to a fee or percentage for his services in executing 
the work. In a work of any importance these different items 
should be figured separately. If a man takes the actual cost 
of labor, equipment, material, etc., and adds to the total a 
guess at what the job will stand for incidentals and profit, he 
is very apt to err in favor of the other fellow. Each item 
should have added to it in the estimate the percentage of 
profit which it ought to bring; and then to this total should 



Profit and Loss 35 

be added such an amount as is deemed necessary or practica- 
ble for risk of loss, unforeseen delays and contingencies, and 
any added profit which the contractor feels justified in ex- 
pecting. 

Get the ''Cream" and Keep It. 

Of two men who are bidding on a piece of work, the one 
who knows where a good piece of machinery can be picked up 
at an unusually low price, and which is just fitted to do the 
work economically, is manifestly at a decided advantage. He 
can put in a lower bid than the man who has to buy a new 
machine, and still make a larger profit. He is apt, however, 
to fall into the error of making his price too low on that ac- 
count. The time and thought which his knowledge of the 
market has cost him is worth something to him. Because he 
is fortunate enough to buy low is no reason why he should sell 
proportionately low — unless the competition would appear to 
make it necessary. The client should not be given the advan- 
tage of every shrewd deal which the contractor's organization 
is able to make. The added profit from these is the "cream" 
which the contractor is entitled to for his extra watchfulness. 

It is strange that so many business men give little atten- 
tion to the material which is handled by their employes. While 
a bonded cashier is employed to handle the money, giving 
strict account for every cent which passes through his hands, 
material, which represents a large expenditure of money, is 
often allowed to come and go with little or no accounting. 

Sheet piling, for instance, is bought for cofferdam work. 
The contractor knows from the bill when the piling is pur- 
chased how many pieces there are. Presumably this all goes 
on to the job for which it was intended. When the work is 
completed and the sheeting removed, the presumption is again 
that it all goes back to the storage yards or on to the next job, 
but nobody knows to a certainty. It has not been counted, as 
money would have been had it heen sent out onto a piece of 
work to pay for labor or supplies. And so, by the time the 



36 Practical Talks on Contracting 

piling gets to the second or third job, it is found not to be 
sufficient for the needs of the occasion, and more has to be 
purchased. 

Material Should Be Accounted For. 

Material should be kept as strictly in account as money, so 
that the amount on hand of any given thing can be determined 
practically as certainly as the amount of money in the bank. 
Little confidence would be placed in the man who would be 
satisfied to know that his bank balance was ah out so many 
dollars. He would be pretty sure to suffer the humiliation 
sooner or later of having his check returned with that odious 
statement, "Not sufficient funds," stamped across its face. 

Some one will ask who is to look after all these details. It 
is the old story of everybody being too busy trying to earn 
money to have time for a thought of saving it. But whether 
a contractor has a large or a small organization, some one 
should be charged with this responsibility. The small con- 
tractor usually overdoes the "one-man" idea, attempting to be 
his own engineer, estimator, bookkeeper and entire office staff, 
in addition to taking active command of the forces in the 
field. Naturally, he does not get time for all the things which 
one would think had to be done, to say nothing of working 
out a system which may appeal to him as more or less dreamy 
and impractical. The large contractor, on the other hand, 
even if he gives the matter a thought, does not want to in- 
crease the size of a staff which seems to him already a heavy 
drain on his income; but he, too, has many things to think 
about, and will not stop to give thought to what he considers 
a matter of simply a few shovels or crowbars. 

The Care of Machinery. 

A contractor must not only get the right equipment, at 
right prices, in order to succeed, but it must be kept in right 
condition. Many a fireman will consume every day as much 
coal as his da5r's wages amount to more than the actual de- 
mands of his furnace require. This may be because of igno- 



Profit and Loss 37 

ranee or laziness. In either case, he is a hard proposition to 
deal with, and should be either instructed or instilled with 
more energy. If there is not immediate improvement his suc- 
cessor should be looked for at once. 

Many a man will also put a machine away for a long period 
with bearings and exposed parts dry and subject to rust, or 
will run them with insufficient oil to minimize the wear and 
give them the greatest working efficiency. Or a boiler will be 
allowed to run almost dry, or a derrick rope will be allowed 
to wear itself out in friction instead of being properly greased. 

The contractor cannot attend personally to all these things, 
to be sure. But they must all be thought of in the selection 
of men to build up the organization. 

Dealing with the Sub-Contractor. 

The relation between the general contractor and the sub- 
contractor is one of the most prolific sources of annoyance 
and possible loss to one or both parties. The contractor him- 
self — the man who enters into a bonded agreement with the 
railroad company or other party having work done — is a per- 
son of responsibility, competent to enter into such a contract, 
and with a business and personal reputation to maintain. He 
has signed an agreement to get the work done at a certain 
time, and even if there is no penalty for failure to do so, he 
feels that he is under obligations to have it completed at that 
time. 

The sub-contractor, on the other hand, is too often a far 
different person. In many cases he is a recent graduate from 
shovel and scraper, and he has not thrown off the nomadic, 
irresponsible habits which are the usual accompaniments of 
life on the dump. The general contractor exacts little from 
him in the way of a contract, as he feels that such would be 
of little value. 

"In a great many cases it works out after this fashion," 
said a general contractor to the writer some time ago. "The 
sub-contractor comes to us and wants five miles of a certain 



38 Practical Talks on Contracting 

job on which we are about to start. We ask him where he has 
been working, and he tells ns. 

" *Did you finish on time ?' we ask him. 

" 'Sure — plenty of time/ he replies. 

" 'Did you make some money T 

" 'Sure — make money.' 

" 'How much ?' 

" 'Oh— plenty.' 

" 'Can you finish this job in six months?' 

" 'Sure — four months.' 

"And so a price is agreed upon, and the man is told to go 
to work. He goes back to his headquarters and loads his outfit 
onto the cars, and in due course of time it gets to the site of 
the work. At this point the 'sub' comes in and says we will 
have to advance him the money to pay his freight bill before 
he can get his stuff and go to work. We remember about that 
job on which he made money, and ask him about it; but the 
final estimate has not been made up, pending which time his 
condition is one of extreme financial embarrassment. 

"Of course we advance him the money. We have signed a 
document which remarks very carefully that 'time is of the es- 
sence of this contract,' and we believe that one man on the job 
will get more work done than a half dozen several miles 
away. He gets his outfit off the cars and exposes it to view — 
a few broken down scrapers, a dozen mules which give symp- 
toms of total collapse — and that's about all. 

"He starts to work — or is supposed to. But his camp is a 
long time in getting established, he has trouble in getting 
men, his harnesses break, his mules fatigue easily. And the 
up-shot of it all is that at the end of the month his payroll is 
about four times the amount due him on work accomplished. 
He is, however, still minus the amount due him on his former 
job, and we cash up his payroll — of course. 

"So it goes on. A while before the work should be com- 
pleted we check up what he has done. He is hopelessly behind 
where he should be, with no possibility of catching up. There 



Profit and Loss 39 

is but one course open to us; we take over the work, put our 
own men on the job, keep a close record of the cost, and if 
there is anything in it above that we turn it over to the ^sub.' 
But more often we have to put on our books a loss of several 
thousand dollars on account of this section of the work." 

"Don't you investigate the standing of these men before 
giving them the work ?" the contractor was asked. 

"We aim to, of course," he replied. "And they should be 
required to show adequate capital and give a bond, the same 
as we do. But as a matter of fact it is often a case of taking 
such as we can get. Then, too, these men have their ups and 
downs. There are ^subs' now w^orking for us with a few mules 
and scrapers w^ho could at one time have written their checks 
for thousands of dollars. They lose it by not knowing the 
business of handling a job. They imagine the taking of a con- 
tract places them in an exalted position. They engage rooms 
in the best hotel at the nearest town, where they spend their 
time in society, possibly driving out once a day to ask the 
foreman how the job is going. Of course, he replies, *^A11 
right/ and so it is for him. And in the end we have to com- 
plete the work." 

The sub-contractor is improving, however, so far as moral 
qualities and responsibility are concerned, just as the general 
contractor has raised himself from a place of suspicion to a 
position of confidence and trust. 

Relations With the Engineer. 

The element of personality in handling subordinates has 
been touched upon previously, but it is a factor just as vital 
to success or failure in dealing with the men higher up. 
This is crystallized in the oft repeated saying that the con- 
tractor who knows the engineer has the advantage in bid- 
ding on a job. And it is not necessary to the truth of the 
statement that the word "knows" should be put in quotation 
marks and given a significance savoring of graft and unpro- 
fessional conduct. The relations between contractor and en- 



40 Practical Talks on Contracting 

gineer may (as they -usually are) be on grounds conforming 
strictly to ethical codes, and yet may be so influenced by the 
personal bias of the engineer as to make bidding little more 
than a gamble for the contractor who is new to the field. 

The uncertainty attached to bidding under the specifica- 
tions of an unknown engineer may arise from two causes : 

First: The care or lack of care with which borings, 
soundings and computations have been made. 

Second: Whether or not the specifications are to be en- 
forced in a spirit of fairness, looking to the proper progress of 
the work and the interests of both parties, or whether they are 
to be enforced to the exact letter, irrespective of modifying 
conditions or unforeseen circumstances which may arise. 

The trial of a Philadelphia engineer for fraud in connec- 
tion with a large filtration plant were based on a lot of clauses 
in the specifications which an alleged set of reformers thought 
should be interpreted to ruin the contractor. For instance, the 
borings for a filter gallery covering a large territory showed 
that the material was all clay and gravel. The engineer un- 
thinkingly put in the clause relating to excavation that the 
contractor was to excavate to the prescribed line for the con- 
crete foundation, and that if any soft material was encoun- 
tered below this line it was to be excavated and refilled with 
concrete at the contractor's expense. The contractor gave a 
lump sum bid on this work, and as the borings showed hard 
ground he naturally made no allowance for excavation and 
refilling with concrete below grade. After the work was com- 
pleted, an area of over an acre was discovered which contained 
muck running as much as 15 feet below grade. This meant 
about $200,000 worth of work, to be done by the contractor 
at his own expense. He naturally objected to doing this 
work without compensation, and had a hearing before the 
proper authorities, who decided that in view of the fact that 
such a large amount of extra work was not contemplated by 
the original specifications he should not be obliged to fill the 
excavation with concrete. 



Profit and Loss 41 

Engineer Both Judge and Jury. 

"Not only are we obliged to accept the engineer as referee/' 
said an experienced contractor, "but in addition must agree 
that our methods, men and materials shall be acceptable to 
him, and that he shall finally decide whether or not we are 
entitled to any compensation, and if so, what amount. Can 
you not imagine that under these conditions the personality 
of the engineer will enter largely into our estimates of costs ? 
Some engineers we do not care to work for under any circum- 
stances. Some require that we add a large percentage to our 
figures to provide for their close and arbitrary dealings and 
interpretations, while still others are known to us as fair and 
liberal-minded men with whom we feel justified in taking 
chances and have confidence in obtaining a square deal. Some 
engineers accept a contract in the same spirit that they would 
the gospel, as something inviolate, any deviation from the let- 
ter of which would condemn them to perdition for heresy, 
while others are willing to look upon it as a purely business 
agreement, to be carried out for the best mutual advantage of 
the two parties. Is it difficult to guess which engineer will 
obtain the lowest prices on his work? 

"As contractors, we naturally expect to assume certain 
risks. We admit that we must be expected to gamble on the 
labor conditions and prices, upon the fluctuation in cost of 
materials, upon the effect of weather changes, upon errors of 
judgment in making our estimates, upon freight delays, upon 
the possibility of serious accidents to persons or property and 
other features of like nature; but worst of all is the gamble 
we take on the uncertainties imposed upon us by the contracts 
and specifications, when we assume responsibility for all de- 
lays caused us by the owners, for all errors or inaccuracies in 
studies or plans, for all oversights on the part of the engineer, 
and not infrequently for the. correctness of the engineer's 
lines and grades. 

"Added to this is the uncertainty of the disposition of the 



42 Practical Talks on Contracting 

particular engineer and inspector assigned to supervise our 
work and upon whom we must depend for the interpretations 
of the ver}^ elastic wording of the specifications." 

The stor}^ is told of a young engineer who got his friend to 
bid on a contract, and he made all kinds of absurd conditions 
and inserted them in the specifications and said to his friend : 
"Why, that is all right. I just want to make a good contract, 
so that they will know tliat I have attended to m}^ duty. There 
will be no trouble about the work, because I don't intend to 
enforce any of these conditions." His friend took the con- 
tract and the young engineer died. Another man came along 
and enforced the conditions. So the contractor cannot be 
sure that the man who draws the contract is the man who is 
going to construe it. 

This whole subject was discussed at some length at a meet- 
ing of engineers by Mr. E. S. Larned, of Boston, who spoke 
especially of the directing engineer and inspector. 

Interference hy Inspectors. 

"On some work it has been found that inspectors who were 
intrusted with passing upon the quality of materials and work- 
manship do not stop with that, but in their zeal and inter- 
est they go further," he said. "They attempt to direct the 
work. If the contractor is a man who is disposed to resist the 
dictation of that sort of an inspector, he may, under some con- 
ditions, claim that it is interference, and under the strict in- 
terpretation of the meaning of the act the inspector is inter- 
fering. And in just so far as he does that he is doing the 
contractor a very great injustice. The contractor, on the 
other hand, realizes that it is policy for him to be reasonable, 
amiable and walling, and he oftentimes does things that he 
knows are causing him a very serious loss in the performance 
of the work. But he does it as a matter of policy. In my 
experience I have seen a very great change in just that feature 
of engineering work. I think. there has been a distinct prog- 
ress. Things are very much better now than in times past. 



Profit and Loss 43 

Chief engineers have come to appreciate that they must look 
after their engineering assistants a little bit more closely, and 
that is a feature I would like to call attention to. Oftentimes 
contractors are not so much afraid of the interpretation of the 
engineer who draws the specification, or the man who is really 
in charge of the work, as they are of the assistant who is put 
in control of the work. Oftentimes the chief engineer is far 
removed from the source of the trouble. He may be fifty 
miles or even much further away, and it takes a long time to 
bring in a question of arbitration. A contractor is reluctant 
to resort to that. He knows it is policy for him to conform 
in every way to the desires of the assistant in charge of the 
work, and naturally refrains from reporting to the chief en- 
gineer that he thinks things are being done that to him are 
an injustice. This is a very important feature. And in con- 
nection with that I have often seen the importance of having 
a more intimate association between the chief and his engi- 
neering assistants. It would be a very helpful thing if chief 
engineers could bring their assistants together at stated inter- 
vals and have an exchange of ideas, a sort of question box 
proposition, and let the young engineers or inspectors, who are 
the men directly in charge of the work, bring up questions of 
doubt or in dispute so the chief may discuss and explain the 
same, and in this way educate and broaden the men intrusted 
with the carrying out of his ideas. There is no question but 
every young engineer needs broadening, and if he has found 
his experience on one work alone it is to be presumed that it 
will be years before he will be able to take a specification and 
interpret it rationally. You will find a difference between the 
interpretations of engineers in different parts of the country. 
New York is one thing, Boston another, and the middle west 
and the far west another. Experienced contractors take these 
things into account when bidding on work. It is not that the 
quality of the work is better in one case than it is in the 
other. 



44 Practical Talks on Contracting 

Doubtful Points Reduced to Writing. 

"Specifications at best are general in describing work. 
Plans in many instances can only be general, and there may 
be many details to add. And if, upon the development of the 
work, conditions arise that result in very material change, 
and the engineer is disposed to confine himself to the most 
economical design originally suggested on the basis of as- 
sumed conditions, irrespective of the contractor's rights and 
interests, then the contractor must, for his own protection, 
formally and by letter state his position. I know of success- 
ful contractors today who make a practice of doing that even 
where there is no occasion for doing so. It is a matter of pol- 
icy with them. The moment they feel in doubt in the slight- 
est degree about conditions or results, they write a letter to the 
engineer that puts him and them on record, and if it comes to 
a judicial adjudication of the case they have established their 
case in advance and fortified themselves very materially. From 
the standpoint of the contractor it is a pretty good policy to 
follow. The question of the intent of specifications and plans 
is a very broad one. One might take exception to many varia- 
tions we find in interpretations of that nature. And it all 
comes back to a question of personality. The reasonable en- 
gineer is as explicit as can be under the conditions, and in the 
enforcement of contracts he is still reasonable and still prac- 
tical. And if he is all that, he is all the contractor can expect. 
One great trouble with many engineers is the fact that they 
are not practical. Their ideas are very good ; their judgment 
as to results can't be challenged ; but their judgment as to the 
method of getting those results is sometimes very open to 
question. If an engineer lends himself to controlling the con- 
tractor in his methods, he makes a very great mistake, in my 
judgment. He would better let the contractor take his own 
way, when possible, and then pass upon the results." 

In one instance an owner and his engineer each called in a 
favorite contractor to estimate on a piece of work. The result 



Profit and Loss 45 

was that the contractor who had been named by the owner bid 
in the neighborhood of $10,000, while the other's bid was 
about half that figure. Presumably the two were equally com- 
petent and equally conservative in estimating. But the former 
had never done work under this engineer, and was obliged to 
take the specifications at their face value, making allowance 
for any hardships which a strict interpretation of them might 
cause him to undergo; the other had worked with the engi- 
neer before, knew his methods of work, and had confidence in 
the accuracy of his estimates as well as the fairness of his 
intentions. And it made a difference of 50 per cent in the 
cost of the work. 

"We contractors all know perfectly well that the person- 
ality of the engineer can make or break us," says James W. 
Eollins, Jr., of Boston, "and the writer leaves out in this state- 
ment any question of actual honesty or dishonesty ; that is, in 
plain words, if an engineer demands in full every and all con- 
ditions of the specifications to be carried out the job is a fail- 
ure financially. Opinions are expressed in the discussion that 
such a contractor should fail, that he has agreed to do certain 
work and that he should be made to do it, made to do perfect 
work. Are engineers perfect? Can perfection be obtained in 
many things — in anything? Perfection is exact compliance 
with specifications; but, may I ask, Is the work better or 
stronger because a joint is exactly one-half inch or the color 
is the exact shade called for, especially as most masonry is dis- 
colored in six months after being laid? But as long as we 
have engineers we shall have the exact ones, who will have 
their pearl gray color and their one-half inch joints, their 
measurements to a thousandth, with perhaps their feet wrong. 
They are surely the 'stewards^ who will get their 100 cents on a 
dollar and the pound of white sugar they ask for; and what 
else? — a reputation among contractors, and the honest ones, 
too, so that after having been ^ed once to the slaughter' they 
refuse to bid on any more work to be done under such engi- 



46 Practical Talks on Contracting 

neers, or bid so high that they will not get the work. The 
writer knows of such engineers — perfectly honest, but not just 
and fair — men for whom contractors will not work at any 
price, and whose reputation even among their fellow engineers 
and their superiors is that of a ^grandma.' 

Details Should Be Left to Contractor. 

"Certain engineers seem called upon to assume all respon- 
sibility of design of temporary work, and then disclaim respon- 
sibility in results. Hasn't the time about come for such men 
to realize that among the contractors are engineers who know 
their own business, and who, knowing it, will be thoroughly 
able to protect their own interests; or who, if they are not 
themselves technical men, are good enough business men to 
get an engineer to figure out for them anything necessary? 
Why is it necessary to furnish plans of centering, ventilation, 
etc., of tunnels, which matters, in the judgment of the writer, 
can best be provided for by the contractors, who make such 
work a specialt}^, all done upon the ground of safety to men; 
and leave out of their plans the handling of explosives? As 
far as the writer has knowledge, the underground work in the 
New York subways and tunnels, in the Pennsylvania railroad 
work, also the subway work in Boston, has all been done by 
the contractors — they making their own plans of temporary 
work and being responsible therefor. In the years of work 
done by the writer on railroads, where certainly the danger of 
loss of life is greatest, the railroad engineers do not pretend 
to say how a contractor shall do his work, in its temporary 
nature. Any engineer has every right to stop a contractor 
when he goes wrong ; so why entail a lot of ill-feeling, disputes 
and trouble, and also do a great injustice, by prescribing all 
details of temporary work, and then holding the contractor 
responsible for it, design and all ? It's not a square deal ; we 
contractors can stand on our own feet, do what is necessary, 
and be responsible for it." 



Profit and Loss 47 

The Pitfall of Specified Prices. 

There is a growing tendency among men who write con- 
tracts to specify prices for certain items. These are places 
where the contractor needs to exercise increased vigilance if he 
would conserve his profits. Such a provision as this is usually 
in the interest solely of the man who pays the bills. In writ- 
ing such a contract the engineer forces the contractor to agree 
to a definite price (usually too low), while not binding him- 
self or his principal to any definite quantity. 

A general scrutiny of the project may reveal little or no 
work under a classification which is restricted in this way, and 
the contractor may either disregard it entirely or allow for a 
few dollars of possible loss. As the work progresses, however, 
contingencies may arise which will alter the entire aspect of 
the job and throw a large amount of work under the classifica- 
tion in question. 

A Boston contractor who has had sufficient experience 
along this line to have a decided opinion upon the subject re- 
lates this experience : 

"On a certain contract executed by our firm, a price of 
$13.00 per thousand was stipulated for sheeting left in place. 
No estimate was given of the probable quantity to be used, 
but it seemed likely that the amount would be inconsiderable. 
On the contrary, there were 150,000 board feet so left in place, 
costing us for the lumber alone $22.00 per thousand, and rep- 
resenting a loss to us of $1,350 outside the labor cost. A pro- 
test to the engineer against this arbitrary allowance on so 
large an amount was met by the argument that we should have 
taken it into account in making up our bid. But how could it 
be considered in the bid when the amount to be used was ab- 
solutely unknown? We were then reminded by him that we 
should not have bid on the work if we did not like the specifi- 
cation." 

Interest on the Part of Worhmen Is Profitable. 

It is well recognized that the tendency of modern Indus- 



48 Practical Talks on Contracting 

trial methods is to destroy the individuality of the workman 
and reduce all to a dead level of mediocrity. And with the 
stifling of individuality goes usually the loss of that enthusi- 
asm which is essential to effective "team work" and the high- 
est efficiency. It is well known that the reason some contrac- 
tors fail is because they cannot hold men together and inspire 
them with enthusiasm which will lead them to carry the work 
on to successful completion. In this connection we might 
well consider some things told by a writer in the Saturday 
Evening Post. He says: 

"While managers are unanimous in their complaints of the 
shortage of good men, they, by the adoption (perhaps, quite 
necessarily) of systems of almost military discipline and 
subordination, either stifle individualism or place it all behind 
such a heavy screen of foremen, sub-foremen, red-tapism and 
repression that they themselves, and the officials immediately 
under them, are unable to discover any indication of it. 

"They then complain of lack of interest on the part of the 
men; but the men are not wholly to blame. Very frequently 
that apparent lack of interest is due, largely, to the policy 
observed by officials of most large manufacturing and con- 
tracting companies of withholding from their men all infor- 
mation regarding their work which could excite keen interest 
in it. A shop order will be sent out accompanied, perhaps, by 
drawings of various parts. The workman on any one of those 
parts does not know, nor does the sub-foreman often know, 
what it is for — what it will, ultimately, become a portion of. 
What interest can a man work up under such conditions? 
What pride can he feel in a few pounds, or a few hundred 
pounds, of metal, be it never so well finished, which has no 
significance of form or destiny ? 

"This secretiveness about business details, which is highly 
necessary and highly commendable in officials who understand 
perfectly what matters are private and what are inconsequen- 
tial, becomes ridiculous when extended to the most trifling oc- 



Profit and Loss 49 

currences, as it often is, by the clerks and juniors in every 
department. 

"The sub-foreman is the man who, above all others, is 
close to the men. He is with them on the job continually. He 
knows the personal peculiarities and capabilities of each man. 
Although the superintendent and chief foreman lay out the 
work, so placing their orders that the operation of one small 
gang dovetails in properly with the operation of other gangs, 
it is the sub-foreman who must be relied upon to carry the 
work of his particular gang along so as to have no conflict — 
either in time, tools or completion of work. Yet this man, 
upon whom almost altogether depends the speed and eorrect- 
ness of detailed work, is very seldom treated with any more 
consideration than one of his men. In outdoor operations it 
is very seldom he is shown any plan of the whole work. It is 
considered amply sufficient to give him a curt order to ^Cut 
that grade down to twelve inches below^ the stakes ;' or, ^Hustle 
your gang, Joe ! That pile of rock's got to be hauled out of 
there before night.' 

"The interest and incentive which any man feels in know- 
ing the special object of the work he is doing is, under such 
treatment, entirely lacking — both in the gang foreman and in 
his men. ^ 

"It is discipline, of course, of a character on w^hich super- 
intendents and head- foremen often pride themselves; but the 
human element of interest in the whole job. pride of gang 
work, and individualism are repressed and stifled. The sub- 
foreman is almost invariably selected for his qualifications as 
a driver of men — and for that alone. He is generally so little 
informed as to other phases of the job he is on, or, if in a fac- 
tory, as to the general business of that factory, that any ques- 
tions put to him on any matters not absolutely under his con- 
trol mortify him on account of his inability to answer them." 



50 Practical Talks on Contracting 



OFFICE SYSTEM FOE CONSTEUCTION WORK. 

BY A. 0. DAVISON. 

IN CONNECTION with an office system for construction 
work, one of the most important things is a simple and 
concise system of timekeeping — a system with which can 
be secured a practical daily distribution of labor expenses with 
the minimum of office labor. With this object in view, the 
following system is given, it being the author's opinion that it 
is better adapted to all classes of construction work than any 
other that could be installed. 

The first step in the installation of a system of this kind 
is to furnish metal numbers or badges for each workman on 
the job. These badges should be about the size of a half dol- 
lar, well nickeled, with a large, plain figure etched and filled 
with black, to make them easy to distinguish when the time- 
keeper is making his rounds to check the men on the work. 
The badges should be supplied with heavy safety pins sd they 
can be worn on the blouse or hat. 

A daily time book (sheet of which is shown by plate No. 
1 ) must be provided for the timekeeper's use only. This time 
book is numbered to correspond with the metal numbers worn 
by the workmen. 

It is absolutely essential that the timekeeper see every 
workman on the job when he makes his rounds in the morn- 
ing and afternoon. He must not be permitted to go to the 
foreman of a gang of men and take his word for any work- 
man being on the job without seeing such workman person- 
ally. The workmen, of course, are known only in checking 
in this daily time book by the numbers of the badges they 
wear, and it is only necessary for the timekeeper to see these 
numbers and note the class of work the men are engaged in. 
This makes it unnecessary for him to disturb the men in their 
work further than to see the numbers on their badges. In 



Office System 



51 



the space provided in this time book under the heading "Kind 
of Work," the timekeeper enters, opposite the number cor- 
responding to that worn by the man, the class of work he finds 



WORKMAN'S NO. 



200 



HOURS WORHEO 



KINO OF WORK 



-f-0- 



AM 



PM 



^ loX^/l^rCgfy He^> 



^ 



ZOl 



AM 



PM 



202 



AM 



PM 



203 



/ 10 



AM 



-■)CC<LVTCt'' 



PM 



iv^_ 



AM 



PM 



205 



-ho- 



AM 



PM 



c^^ 



^' ^LA<i V_-<nr-\^^-etjL 



206 



/ J-Q- 



AM 



PM 



Q-jxt^. ^">\^ 



207 



v^ 



AM 



jQerT..^ \ 



PM i 



.^ 



^ 



-i-Q- 



AM 



- X C^4-v-tCtX ^x q 



PM 



209 



-h&- 



AM 



PM 



(jbUK- t">A</<A/^ 



l^'iy. lfVVvxJL/«r- 



AM 



PM 



211 



/- 



■v^ 



AM 



PM 



rvt-axji^ MnvcrttJL 



JO aXvwo^ V iisJ 



Plate 1— Timekeeper's Daily Time Book. 



him engaged in, such as "Excavation/' "Building Forms/' 
"Eepairing Plant/' etc. In checking on his second trip, if he 
finds the men engaged in the same class of work as on the 
first trip, it is noted by a check mark; or if the man has been 
transferred to a different class of work he makes this notation 



52 Practical Talks on Contracting 

opposite his number, as was done on his first trip over the 
work. 

Each foreman is provided with a small monthly time book 
in which he carries all of his men by number and name. The 
foreman is also provided with daily time sheets (plate No. 2), 
on which he makes a daily report of all his men by number, 
distributing their time under the various classifications of 
work in which they are engaged during the day. It is essen- 
tial that the foreman make sure that each one of his men is 
given the same number of hours in his monthly time book that 
he turns in on the corresponding day on his time sheet. These 
daily report sheets must be made out by the foreman immedi- 
ately when his da/s work is done, and turned in to the time- 
keeper, who extends the total hours, applies the rate per hour 
and makes his extensions in dollars and cents under each 
classification of work reported, balancing his totals, thereby 
giving the total labor expenditure for each crew of men on the 
job. He then checks his figures by filling in the summary in 
the lower left-hand corner of the sheet, by taking from such 
sheet the total number of men and total number of hours at a 
given rate, which, when extended in dollars and cents and 
footed, checks his amounts in detail on the sheet proper. On 
this daily time sheet, under heading "Description of Work 
Done,'^ the foreman reports the quantities of each classification 
of work his crew accomplishes during the day, such as "Num- 
ber of Yards Excavated,^' "Yards of Concrete Placed," "Feet 
Board Measure Built Into Forms," etc. 

After the timekeeper has received and extended all daily 
time sheets for the day, he enters the total hours for each man, 
taken from the foremen's reports, in his daily time book for 
the corresponding day, at the same time noting whether or 
not the foremen report such men under the same classification 
of work that he has noted in his time book. If the timekeeper 
has made his rounds of work thoroughly, seeing each work- 
man on the job, both morning and afternoon, it prevents any 
man being reported by the foremen in error or otherwise, and 



Office System 



53 



also prevents any workmen being short their time by omission. 
It also prevents any time being reported under the wrong 
distribution. 



THIS REPORT MUST BE MADE OUT AT CLOSE OF WORK f ACH DAY 

B.T.CO. 

D/MLY Tint SHEET DATE 190„ Contract. 




DISTRIBUTION OF LA80R 








1 

l 
U9 


i 

e 






J 

6 




3 


i 




i 

3 




No- 


EMP. NclHrj. 


Mrs. 


Hrs. 


Hrs. 


Hra. 


Hra. 


hrs. 


Hrs. 


Hr.. 


Hrs. 


Hrs. 


To-tdlHrJ 


Ware 


1 


loo 














/O 










/o 


./O 


y 

1 « 

i 1' 

A. ' 

i' 

1 


z 


ISZ 




















10 




10 


./7* 


3 


/ 2.C0 




10 




















10 


20 


4 


/203 


/o 






















10 


20 


5 


/^05 


5 








5 














10 


.20 


6 


/2.06 


5 










5 












10 


.20 


7 


^208 


/o 






















10 


.20 


8 


^209 












5 




5 








10 


.20 


9 


/21I 










5 








5 






10 


.20 


10 


304 




fO 




















10 


.35 


11 


3^0 






/O 


















1 


.40 


12 


341 






/O 


















10 


.40 


15 


342 






/£> 


















to 


40 


H 


^ 207 








10 
















10 


20 


15 


345 








10 
















10 


4o 


16 


2^10 












5 




S 








1 o 


zs 


17 






























18 






























19 






























to 






























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Total H.i 


30 


20 


30 


zo 


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10 


5 


10 




i6o 






Amount 


6 01 


5 50 


.^ 


6 


00 


2 


OO 


3 


25 


/ 


CO 


2 


iS 


1 


eo 


1 


IS 






40.75 




Summary il 


DESCRIPTION QF W0«(^ DONE 


No.M 


n Hrs, 


^ate 


Amsunt II 


/ 


10 


./O 


/ 


00 




1 


10 


./7i 


/ 


75 


20 Wo-vtL^ tA.rtJk. xY-c-<iv-iitt/L 


8 


60 


.20 


lb 


00 


IS ii#\.rtti» t,«-TvcA<tX/ 'tjXoULtA' 


4 


40 


40 


lb 


00 


10 OO' ^^IVTYvA^t- A.«J»JL<L a\v t^l-^^v^ 


/ 


10 


35 


3 


50 


bo i2>o.t\s.A tJLv«-\js.v.t a>.^jjlJl 


/ 


10 


25 


2 


So 




• 












1 '6 


/<30 




4c 


A 





Plate 2— Foreman's Daily Time Sheet. 



The accompanying plates, No. 1, representing sheet from 
daily time book, and No. 2, representing foreman's daily re- 
port, have been made out as they will appear. No. 1 is shown 
after the timekeeper's check, both morning and afternoon, and 



54 Practical Talks on Contracting 

after the time has been entered therein from the foreman's 
daily reports. No. 2 is made out, extended and balanced com- 
plete, as it will appear after being turned in by the foremen 
and figured by the timekeeper. 

The check marks appearing before "Employees' Num- 
bers/' on plate No. 2, correspond with the numbers on plate 
No. 1, where hours are entered. This check mark is made on 
the foremen's reports to indicate that the hours have been 
transferred therefrom into daily time book, preparatory to 
being entered from the daily time book into the monthly time 
book. 

The check mark appearing after "Workman's Numbers," is 
an indication that the hours have been entered from the daily 
time book into the monthly time book. 

After all foremen's reports have been extended and bal- 
anced, and total hours transferred therefrom to the daily time 
book, the timekeeper then makes up a summary sheet (Plate 
No. 3) from all foremen's reports, which gives him the total 
daily labor expenditure distributed in totals under the various 
classifications for the day. This summar}^ sheet is merely a 
recapitulation of all foremen's reports and does not carry with 
it anything except totals in dollars and cents in each classifi- 
cation reported by the different foremen. For instance, two 
or three foremen may have their men engaged in the same 
kind of work, and in all cases this summary sheet gives the 
grand totals of each distribution of labor expense for the day. 
The total of each foreman's report is carried out on this sum- 
mary sheet under the heading provided for that purpose, and 
the gi'and total of such totals is checked against the totals of 
the various distributions, which makes an absolute check on 
daily labor expenditures. 

After the daily time book has been checked up to see that 
each man is reported, and that none are reported which the 
timekeeper did not check on the work, he then enters from 
this daily time book the total hours in his monthly time book 
(sheet of which is shown by Plate No. 4), opposite the corre- 



Office System 



55 



sponding number, which number carries with it in the monthly 
time book the name of the workman. 

The monthly time book should be so arranged and metal 











DAILY 

Contra 


ft 


TIME SHEET 


SUMMARY 

Date 








190 _ 












1 
































































































































































































































































































































































































































































































































































































































































































































































-\ 














































REPORT 

TOTALS 
























































































































































































































































































































































































































































































































































































































































































































































1 — 



Plate 3— Timekeeper's Summary Sheet. 



numbers so distributed that a given block of numbers repre- 
sents a given rate per hour. For example, 100 to 125 may rep- 
resent a rate of 10 cents per hour; numbers 126 to 150, a 
rate of 15 cents per hour; 151 to 175, a rate of 17-i cents per 
hour; numbers 176 to 250, a rate of 20 cents per hour, etc. 



56 



Practical Talks on Contracting 



After the time on any day has been transferred from the 
daily to the monthly time book^ the blocks of numbers in the 
monthly time book representing each different rate are totaled 



MONTHLY Time BOOi^ 


MONTH EnDINS 190_- 


Ho.! NAME Jl 


e 


*• 


4 


s 


6 


7 


a 


9 


10 


n 


12 


SS 


i; 


15 


1£ 


17 


18 


19 


Zo 


21 


ii 


23 


it 


iS 


IS 


27 


ze 


19 


3a 


31 


TOTAi. 
MRS 


RW 


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r~ 1 




























































































































































































































1 






















































































































































i 












































































1 
















































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































1 — 




























































































































































































































































































































































































































































































































































































i-i 












" 
















































































_ 












1 




, 




1 


1 











_ 




_ 




_ 








LJ 



Plate 4— Monthlj' Time Book. 



for that day, which gives the total number of hours for each 
given rate for the day. These total hours extended in dollars 
and cents and totaled (Plate No. 5) must check with the total 
amount shown on the summary of all foremen's reports for 
the corresponding day. This gives the timekeeper an absolute 



Office System 



57 



check on his hours and extensions each day and prevents any 
errors in hours or money when the pay roll is made up on pay 
roll dates. 



TOTAL DAtLY HOURS 

ANJ) AMOUNT 
FROM MONTHLV TJME BOOK 


TOTAL Hoofts 


RATE 


AHdUNT 

















































































































Plate 5— Totals for Checking. 



Pay Roll Distributions. 

For the purpose of pay roll distributions, a loose-leaf 
binder should be provided to accommodate sheets 14x17 
inches. The first sheet (Plate No. 6), the full size of the binder, 
is designed to take care of the dates and daily totals of labor 
distribution, . as well as headings for detailed distributions, 
sufficient sheets without side headings (Plate No. 7) being 



58 Practical Talks on Contracting 

added to accommodate all headings required for a complete 
distribution of all classifications of the work. One complete 
set of these sheets will take care of two months' labor distribu- 
tions, as shown by plates. After this a sheet is inserted 
(Plate No. 8) to take care of additional dates and totals and 
sufficient sheets (Plate No. 9) to take care of following dis- 
tributions. 

The pay roll distribution book, when supplied with suffi- 
cient sheets Nos. 6 and 7 — No. 6 to take care of dates and 
daily totals in the side heading, and No. 7 to accommodate 
all headings required for a complete distribution of the work 
— makes the pay roll distribution book complete to take care 
of two months' labor distribution, as explained. At the ex- 
piration of this time one additional sheet to take care of addi- 
tional dates and totals is inserted and sufficient sheets (Plate 
No. 9) added, which makes this record complete to take care 
of an additional two months' distribution. This operation to 
be repeated at the end of each two months during the term 
of the work for which the distribution is made. 

This record is entered up daily, taken from the summary- 
totals as made up from the foremen's daily reports. At the 
end of the month, or at pay roll dates, this distribution book 
is balanced against its own totals, the monthly time book is 
extended and figured into dollars and cents and balanced 
against the totals of this labor distribution for the correspond- 
ing month. The totals thus secured, when balanced, give the 
gross amount of pay roll. The detail from the labor distribu- 
tion book secured from this balance makes the proper credit 
entry for the pay roll account in the individual ledger. 

As being directly in connection with the keeping of time, 
it might be well to mention here that items such as "Black- 
smith Shop," "Barn," "Lumber Supplies," etc., should be 
carried under their individual headings and all labor ex- 
penses in connection therewith be so charged, monthly distri- 
butions being made giving such accounts the proper credit and 
charging them out to various parts of the work on which they 



Office System 



59 



apply. For example, everything in connection with the black- 
smith shop should be charged to it under the proper headings, 
such as "Labor," "Material," "Coal," etc. The blacksmith 



! 




1 




















« T 


















































































































































































































rd 
























.— - - 


































































( 




















1 








































^„-— ^ 






















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^^ 




















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y 








































/ 




















y 
















-^ 






























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y 


















X^ 




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CH 


































































































































































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/ 


















/ 


















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^ — — ^ 
















/ 








































/ 












y" 










) 










/ 








y 








y 








> 


j y 


y 





Plate 6 



Plate 7. 



































































































































































































































































\ 
















On 




































































































































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/ 





M ' 














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[ 




































1 
























































































r^ 












































































































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y' 


1 
















^ 
















—/ 


















/ 














, 
















/ 
















/ 














7 












>■ 














^^ 
























1 










/ 


























_y' 








^ 










z^ 


V 





Plate 8. 



Plate 9. 



should keep a book distributing the hours of himself and 
helper each day on the work done for any particular part of 
the job, weighing out and charging up the number of pounds 
of material used, together with the time. At the end of the 



60 Practical Talks on Contracting 

month this book is to be figured in dollars and cents at a rate 
per hour to cover time of blacksmith and helper, together with 
coal consumed, material to be figured at the proper prices per 
pound, all of which is to be charged to the part of the work 
on which it applies, and the blacksmith account credited. If 
the proper figures are used in making this distribution the 
balance at the end of each month on blacksmith account 
should represent practically material on hand. The same 
thing would apply to "Lumber Distribution," "Pile Distribu- 
tion," etc. 

Distribution of Time of Plant. 

The time of each piece of machinery on a job should be 
kept and reported each day by the foreman, the same as he 
reports his men, showing number of hours each machine is 
engaged on different classifications of work, time idle for re- 
pairs, etc. All expense in connection with the operation of 
any piece of machinery, such as "Derrick No. 1," "Cableway 
No. 1," "Cableway No. 2," etc., should be charged to operation 
of such machine daily. At the end of the month the total ex- 
pense of operating any given piece of machinery must be 
arrived at and figiired into an hourly rate, and this amount 
charged to the part of the work to which it properly belongs 
by taking the total number of hours in which the machine 
was engaged on any particular class of work during the month 
and multiplying it by the rate per hour arrived at from the 
total monthly expense of such operation. 

Pay Rolls, Deductions, Etc. 

After the monthly time book and labor distributions have 
been properly balanced, the amount thus secured represents 
the gross total of the pay roll, which should then be made out 
in the following manner : Each workman's number and name 
to be entered on the roll (Plate No. 10) in space provided for 
this purpose, the total hours, occupation, rate and gross 
amount following his name in the space provided. After all 



Office System 61 

names and gross amounts have been entered on the pay roll 
sheets^ each sheet is to be totaled, such totals being carried 
to the summary sheet and footed to see that all gross amounts 
have been properly transferred from the time book. When 
this balance is proven, the next thing to be done is to make 
all deductions under the proper headings, after which the 
deductions are all to be cross-footed and totaled in column 
headed "Total Deductions/^ After this is done the total de- 
duction column is taken from the column representing the 
gross amount, which amount gives the net amount due each 
man, which is carried into the column under the heading 
"Net." Each sheet is then balanced individually, the foot- 
ings of all deductions checking out with the total column 
headed "Total Deductions." The total of the "Total Deduc- 
tion" column and "Net Amount" column will balance with 
the total of the "Gross Amount" column. After each sheet is 
thus balanced individually, all footings thereon are carried to 
the summary sheet, under their proper headings. This sum- 
mary sheet is made out as follows : 

Your next pay roll sheet in the binder following the last 
sheet of the pay roll is used for this purpose. On the first 
line of this sheet, in the space provided for workman's name, 
should be written "Sheet No. 1," all totals from sheet to be 
carried under proper headings. This to be followed in the next 
line with "Sheet No. 2," all totals of this sheet entered under 
proper headings. This to be followed by "Sheet No. 3," etc. 
This summary sheet is then balanced in the same manner in 
which each individual sheet has been balanced. After the roll 
has been balanced, the next thing in order is to take from the 
cash book any items paid prior to the making up of the pay 
roll. Any deductions made from the roll for which checks are 
not to be issued must be charged to the individual pay roll 
account by journal entry, and credited to whatever expense on 
the work to which they properly apply. After this journal 
entry, if any, is made the amount covered by it must be de- 
ducted from the gross amount of pay roll, and the total of 



62 



Practical Talks on Contracting 



1 

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1 

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1 

1 

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__ 



Plate 10— Pay Roll. 



Plate 11— Discharge Check. 



Office System 63 

checks previously issued be calculated and deducted from this 
total, the amount remaining representing the total net amount 
to be paid on pay roll. Checks are then written or cash pro- 
vided for this amount. This operation when completely car- 
ried out makes the credit and debit entry to the individual 
pay roll account agree each month, thereby keeping the pay 
roll account always in perfect balance. 

Mention has previously been made of material supply ac- 
counts, such as "Blacksmith Shop,^' "Barn/' "Lumber Sup- 
ply/' etc. To go further into the detail of such accounts the 
following method of handling them is suggested. 

All purchase prices, freight, hauling, handling, etc., of 
lumber would be charged under the heading of "Lumber Sup- 
plies," which heading is subdivided under the headings of 
"Cost,'' "Freight," "Hauling and Handling." AU these 
charges distributed give the cost of lumber land down on the 
work ready for use. This total expense when figured at the 
end of any month and divided by the number of feet board 
measure, gives the cost per thousand with all expense of hand- 
ling included. At the end of each month a report showing 
the number of feet board measure used in each part of the 
work is to be made up and multiplied by the price per thou- 
sand feet board measure and charged out from this report to 
each individual part of the work in which it is used, Lumber 
Supply account being given credit for the total amount thus 
charged out. In this way the Lumber Supply account at the 
end of any month shows the amount of lumber on hand not 
used. 

The pile supply account is handled in the same manner as 
the lumber supply, the original cost, freight, hauling and 
handling being charged in the same way as explained above 
and report made up at the end of the month charging that 
proportion used to the part of the work in which it is used, 
same being credited to pile supply, so that at the end of any 
month the pile supply account will show the amount on hand 
not used. 



64 Practical Talks on Contracting 

If coal is used as fuel, the same operation is followed as 
outlined above, charging coal supply account with the original 
cost, freight, hauling, etc., and a report made at the end of 
each month showing the number of tons used by each boiler, 
which amount is charged out at the price per ton, thus arrived 
at, coal supply being credited. The balance in coal supply at 
the end of the month will thus represent the amount on hand 
unused. 

A similar account should be kept for nails, charging such 
supply account with the original cost, freight, hauling, etc., a 
report being made at the end of each month charging out the 
proper number of pounds used in each classification of work, 
nail supply being credited, and the balance at the end of any 
month, after such distribution has been made, will show the 
quantity of nails carried in stock unused. 

When a company maintains a barn in connection with the 
work, all expenses in connection with the maintenance should 
be charged under the heading of "Barn,^' which is subdivided 
under headings of "Labor," "Feed and Bedding," "Eepairs," 
etc. The correct daily distribution of the time of such horses 
or mules should be kept, showing the number of hours they 
are used on the various classifications of work. At the end of 
the month a report should be made up, distributing the total 
hours of each team on the different parts of the work as they 
are used, such hours being multiplied by the prevailing rate of 
team hire in the locality that it would be necessary to pay for 
teams if hired instead of maintaining a bam. After such 
distribution has been made and credited against the month's 
expenses of such maintenance, the result will show whether 
or not it would be more profitable to a contractor to maintain 
his own barn or hire outside teams at the prevailing rate. The 
original cost of horses, mules, wagons, etc., should be charged 
to the plant account under the heading of "Barn," as there is 
a salvage to be derived therefrom at the close of the work, 
which at that time goes to the credit of the barn account 
under plant, and a distribution to be made of the amount then 



Office System 65 

remaining in this plant account, which is depreciation and 
which is to be charged pro rata to the various parts of the 
work. 

In distribution of blacksmith expense the original installa- 
tion is of course charged under the heading of ^^Blacksmith 
Plant/^ from which there is a salvage derived at the close of 
the work. All materials, labor, coal, etc., are to be subdivided 
in operating expenses under the heading of blacksmith shop. 
The blacksmith is to keep a complete daily record of time of 
himself and helper and amount of material used in pounds, 
showing to what part of the work it applies. At the end of 
the month a distribution is made in the office from this black- 
smith report and each part of the work charged as distribu- 
tion shows, the total amount going to the credit of blacksmith 
shop ; the balance at the end of any month remaining charged 
to blacksmith shop should represent the amount of unused ma- 
terial on hand at that time. In such distribution, of course, the 
shop is charged back with all time and material consumed in 
repairs and making of tools for use in the shop. 

Discharge Check or Time Check. 

In cases where it is found necessary to issue time checks 
between pay days, or where discharged men are paid by dis- 
charge check, a convenient form is shown (Plate No. 11). 
The writer has found that it is the most satisfactory not to 
issue bank checks or cash in any form except on regular pay 
days, and where this method is followed the accompanying 
time check is convenient for use. 

Requisitions. 

In order that proper records may be had of all materials 
and supplies ordered, a form of requisition blank (Plate No. 
12) is suggested. This form to be made in triplicate, with two 
copies detachable and third copy remaining in the requisition 
book as a permanent record. Where the works office is removed 
from the central office, this blank is used in making requisitions 



66 Practical Talks on Contracting 

on the main office for all materials and supplies required. This 
requisition blank carries a column for quantities, a column for 
description, a column for receiving dates and a column for dis- 
tribution. 

Order Blanks. 

A convenient form of order blank is shown (Plate No. 13). 
This order book, like the requisition book, is made in triplicate, 
the original to be mailed to the party from whom the purchase 
is made, the duplicate kept on file to be attached to invoice 
when received, the triplicate copy remaining in the book as a 
permanent record. The order blank conveys instructions to 
mail all invoices in duplicate, the duplicate copy of such in- 
voice to be sent to the office at the work, which, when re- 
ceived, is checked by the material clerk and attached to the 
duplicate copy of the requisition on which is noted receiving 
dates, together with any shortage or irregularities in ship- 
ments which may occur. After this has been properly 
checked the duplicate invoice and duplicate requisition are 
mailed to the main office and they in turn are then attached 
to the original invoice, together with the copy of order, which 
gives a complete record showing any shortage or irregularities, 
dates received and distributions for the different articles 
thereon. 

Accomits Payable Ledger, 

A special ledger ruling is suggested (Plate No. 14) to be 
used for all accounts payable. A ledger of this kind contem- 
plates the entry on the credit side of each and every invoice in 
detail ; in other words, an exact copy of each invoice received. 
In the column headed "Used For," the distribution as shown 
by the requisition is entered and in the column headed 
"Charge" is entered the name of the particular job on which 
the expense applies. It will be seen that this method contem- 
plates but one journal entry for a month^s business. It will 
also be seen that in order to do this, all entries made during 
the month must be carried in the date column under the cur- 



Office System 



67 



rent month; that is to say, that if any invoice has been car- 
ried over from a previous month by reason of goods not being 
received and checked, or any other irregularity, when such 
entry is made, it must bear the date in the date column of the 



( TlRM . N^ ME ) 

RfquiSiTiON No 

Datp 19 


QeNTt-CMEN: 

"PiFAse oRorp THF FOtLowiNo. ma 

^^^^■o ro.. , . , , 'Pf* 




(station) 


(fHcii^MT, cxpness.n'Mi.} 


quANTiTy 


/ARTICLES 


REceivt 


To 8E. 05ED FOR 


















































































































































































/\PPR 


r^\^^I^ Ry 






MATfRrAl. CLE^tS 


SuPeitiNTCNeeN r 





Plate 12— Requisition. 

month in which it is entered, and if the invoice is for a pre- 
vious month the actual invoice date must be carried inside the 
column. 

After all invoices have been entered for the month a dis- 
tribution is then taken from the ledger for such month on a 
sheet (Plate No. 15). This sheet is headed "Distribution Ac- 



68 



Practical Talks on Contracting 



counts Payable Ledger For *. . .19. .." This ledger dis- 
tribution sheet carries the ledger folio, the name of the ac- 
count, and the total amount credited for the month, which 
total is distributed on the sheet under the proper accounts to 



^ Firm Name ) 

Cnn\rac.\, "R»^ 


_19_ 
Mo 


- 








^Uftse 






- 










(JOANTiTy 


/\RTIC L E5 


Pr.ce 


/Amount 


















































































































































































































































































By 






T?A. 



Plate 13— Order Blank. 



which these items are to be charged. When all accounts are 
taken from the ledger and distributed on this sheet and bal- 
anced, it gives one journal entry which covers the complete 
distribution of the month's business, as shown by such ledger. 
After such distribution has been made this distribution sheet 
is folded over, allowing only the ledger folio and the name of 



Office System 



69 



the account to show. In this way the combination of this 
distribution and the trial balance shows at a glance whether or 
not the liability column of such trial balance covers more than 
a current month's business. When the journal entry is made 
from this distribution sheet, a form is to be drawn in the 
journal, and the complete sheet, including the distribution and 
trial balance, kept in the journal as a permanent record. 



10 








Foi.o 






O«0(ff 




ro.,o 


UstO too 


c-.«.. 1 












1 1 








































































































































































































































































































































































































































































































































































































^_^--^ 






















^^ — ' 






















/ 






















^ 




















\ -^ 
















J 


















^ 














L-^ 






^ 


^ 















Plate 14. 



Ledger Distributions. 

After all entries have been made and the books balanced, 
any or all expense accounts which carry a detailed distribution 
are to be distributed through a ledger distribution book ; such 
distribution is made in a loose-leaf book as explained pre- 
viously, and for this purpose sheets as shown by Plates 6, 7, 
8 and 9 are used. For example : 

In this method, in the general ledger, all expense of any 
piece of work is carried under heading of "Expense." At the 
end of each month all charges and all credits to such expense 



70 Practical Talks on Contracting 

are distributed on this ledger distribution book in the follow- 
ing manner : 

The debit side of such expense accounts is first taken and 
the first item charged is carried on the first sheet of the group 
of four sheets shown on a previous page, with the total of such 
charge. This total is then distributed over various parts of the 
work in the same manner as explained in distribution of labor. 
When the item arrived at by the accounts payable ledger dis- 
tribution is handled in this book, the total amount which has 
been charged on the ledger distribution sheet to such expense 
is carried, as a total, in this book, together with the accounts 
payable folio and the account name. After all of these totals 
for the month have been carried te this book and balanced the 
distributions are taken from reference to the individual ac- 
counts and distributed as shown in the column in such ac- 
counts payable ledger under the heading "Used For." These 
charges, after they have been distributed, are balanced against 
the total of this book, after which the credit side of such ex- 
pense account is carried to the same book, properly distributed, 
and deducted from the amounts charged to such distribution. 

Final Distribution. 

After such ledger distributions have been made and prop- 
erly balanced each month, the totals carried under each dis- 
tribution are then carried to the final distribution book, which 
book is a loose-leaf book 14x17 inches, and the sheets of which 
are shown by Plates 16 and 17. 

It will be seen that all headings in this final distribution 
book are carried to the left-hand margin of the full pages, in- 
stead of at the top of pages, as was the case in the labor dis- 
tribution and the ledger distribution books. This final distri- 
bution book carries with it columns showing the "Material 
Costs," "Labor Costs," and "Total Costs," the headings to be 
so arranged that each individual part of the work shows the 
total expense thereon for any one month and the total costs 
to the end of the last month. Columns are also provided on 



Office System 



71 





1 








1 
















■— r 






















































































1 


























































































































































































-;^ 


J—- ^ 







































i — '- 








































=^ 



































y 
































































X"^ 


























)>^ 
























-^ 



















"^ 


■^ — 












_ „■ 1 














^ 








J- 













Plate 15. 



this sheet in which to carry quantities and units both for the 
earnings and the expense ends. 

After the current month has been entered on these sheets 
and totaled with the previous month's expense, the amount 





■ 




1 






M""f. 


Mesx 


/ 


3'.'. 


o* 


ToT,(. 


0*'* 


T„„. 


L". 


1 woo 


/ 


>-A, 


./ 


fcr**4. 


y*^ 


To 7 A.. 


\ 
























1 












































1 












































1 












































1 












































1 












































1 












































1 


















\ 








































^^ 




























1 
















0-| 




















































































































































































































































































































/ 












































^,...^-^ 












































Y 










































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f 








































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L— J 


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Plate 16. 



72 Practical Talks on Contracting 

thus arrived at is the balance as shown by the corresponding 
expense account in the General ledger, and thus gives a com- 
plete detailed distribution of the various expenses of each and 
every part of the work. 

Accounts Receivable Ledger. 

A special ruled sheet for accounts receivable ledger is 
shown (Plate No. 18). This sheet contemplates entering in 
detail all bills, and carries with it a column showing the ac- 
count to which proper credit belongs. This ledger is prac- 
tically the same as the accounts payable ledger with the ex- 
ception that the special ruling is reversed ; in other words the 
credit side of the Accounts Payable carries the special ruling, 
while the debit side of the Accounts Eeceivable has the special 
ruling. 

Filing System. 

The following is suggested as a complete and accessible 
method for filing invoices, bills and letters. A tag-board file 
back 8 J inches by 11 inches is used, and, for invoice filing, they 
are numbered consecutively, all invoices being attached in date 
order, later dates on top. An index for this file is arranged 
alphabetically, the firm name appearing thereon, together with 
the number of the file. These invoices are then filed in boxes 
or cabinets securely attached to their respective file backs and 
are located by reference to the alphabetical index when wanted. 

All bills are filed in the same manner and indexed in the 
same way. 

All letters are similary attached to file backs and indexed 
according to firm names on an alphabetical index, and in addi- 
tion are cross-indexed under subjects. For example: The firm 
of Smith & Co. may be indexed under the letter "S" as letter 
file No. 50. The various correspondence with this concern may 
have reference to a dozen or more different subjects. In such 
case the firm name of Smith & Co., together with their file No. 
50, would appear under a subject index alphabetically ar- 



Office System 



72, 



ranged, under as many different subjects as are referred to in 
the correspondence. It will thus be seen that in order to get 
out correspondence it is not always necessary to know from 
what firm the letters were received; but if it is known what 
subject is to be looked up all letters pertaining to such subject 
can be found by reference to this subject index. It is, of 









()«,«, 


1 lAsoa 


^-^ 


3J", 


^0* 


Tom. 


0''* 


Tor^i. 


•H'' 


iAeoH 


/ 


i.„iu. 


y~' 


Tor,,. 


0''' 


ToI'M-l 
















































































































































































































































































f^ — 


































C-| 
















































































































































































































































































^y^ 


































:hz 


































JL-' 






























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} 






















L 


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/ 


^ 


















/ 




















y 














^ ^ 










i t 


y 










y 





Plate 17. 



course, only necessary to file any one firm's correspondence in 
one file and index it in as many different places as is necessary 
to cover all subjects referred to in the complete correspond- 
ence. 

Progress Reports of Work Accomplished. 

In order to make daily and weekly comparisons of earn- 
ings and expenses, it is suggested that a progress sheet be 
ruled up with proper headings to take care of each classifica- 
tion of work which is paid for at unit prices, this sheet to be 
so arranged that it will take care of one month's progress re- 



74 



Practical Talks on Contracting 



ports by dates. The information. for keeping this record com- 
plete should be obtained from the Engineering Department 
and from the Foremen's daily reports showing quantities done. 
The report should carry, in case of river work, a column to 
show the stage of the river, a column to show the weather 
conditions, and sufficient columns to show various quantities, 
such as "Yardage of Excavation," "Yardage of Concrete," 



10 

Fii F Hn 








rotio 


USIO foR 


r 

Credit 








Folio 


























































































































































































































































































































































































































,V 






























y 
































y 


























^ 


























/ 
























y 




































yy 


i^- 














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^ ' 















y^ 










_^.-^' 








^ 








^ 





Plate 18. 



"Number of Piles Driven," "Feet Board Measure" in perma- 
nent work and, in fact, each classification under a separate 
heading for which estimates are allowed. Such progress re- 
ports, when compared with labor expenses for the correspond- 
ing day, together with a daily estimated expense for material 
and supplies, make a very convenient and reliable record for 
keeping in close touch with the daily progress of the work. 

For the use of the Superintendent in charge of the work 
it is very valuable and convenient to keep a combination rec- 
ord showing a daily report of labor expenses and quantities 
secured. This can be done and arranged in very convenient 



Office System 75 

form by using a sheet on which can be shown each day the 
total labor expenses, number of men, under headings of "Com- 
mon Labor," "Teamsters,'^ "Foremen," "Engineers," etc., this 
total daily labor expenditure being distributed according to 
the summary of the foremen's reports for the corresponding 
day, under the various classifications of work, together with 
the quantity of each kind of work done. This report can be 
quickly made up from the timekeeper's records and the engi- 
neer's progress report in the evening and referred to the Su- 
perintendent the next morning, from which he can see exactly 
what was accomplishd on the previous day. Such record 
allows the Superintendent to keep in close touch with each 
branch of the work, so that if he finds some part of it making 
losses he can remedy such defects, unless there is good reason 

for it, without allowing such expense to go on to exceed one 
day. 

The principal benefit to be derived from such a detailed 
distribution of material and labor expenses is apparent. When 
handled in this way the expenses are so divided that they can 
be used in estimating new work regardless of location and local 
conditions. The parts of such expenses which have been kept 
on any job of work which would not apply to location or con- 
ditions of new work to be figured can be eliminated and that 
part of the expense which would apply to such locations and 
conditions can be used in making such estimates. 



76 Practical Talks on Contracting 



LIABILITY INSURANCE FOR CONTRACTORS. 

BY C. ARTHUR WORDEX. 

LIABILITY insurance, sometimes called indemnity in- 
surance, is written under various heads, but those of 
the most importance to the contractor are: Em- 
ployers' liability, public liability and team insurance. 

In employers' liability insurance, the insurer agrees to in- 
demnify the assured against "loss by reason of liability im- 
posed by law upon him for damages on account of bodily in- 
juries, including death, at any time resulting therefrom, acci- 
dentally suffered by reason of the prosecution of the work, at 
the places described in the policy, and under the classifications 
coA'ered by an employe or employes of the assured." 

Public liability insurance differs from the above in so far 
as it insures only against injuries sustained by parties not in 
the employ of the assured, or, in other words, the public. 
These policies are written at a lower rate than the employers' 
policies. 

Team insurance covers the owner's liability to his driver 
and to the public, for damages on account of bodily injuries 
caused by means of draught or driving animals or vehicles in 
the service of the assured and the use thereof and while in the 
charge of the assured or his employes. 

Liability insurance policies are usually written for what 
are termed $5,000 and $10,000 limits. This means that in 
case of an injury or loss of life to one person, the insurer will 
indemnify the assured to the extent of $5,000 ; and where an 
accident has resulted in the injury or death of more than one 
person, the indemnity will be increased to $10,000. Excess 
limits, such as $10,000 for one person and $20,000 for more 
than one person, are written at a slight increase over the regu- 
lar rates. 



Liability Insurance 77 

Liability insurance premiums are based upon tlie amount 
of pay rolls, i. e., in taking out a policy an estimate is made 
of the probable amount of pay rolls which will be expended 
during the policy term, and a certain percentage of this 
amount is charged as premium. This percentage, or rate, will 
vary according to the hazard involved in the contractor's work. 
The ordinary rate is about 1^ per cent of pay roll, but, as in 
the case of a contractor engaged in wrecking or demolition of 
buildings, the rate may run as high as 5 or 6 per cent. 

In case a contractor is engaged in several classes of work, 
involving various hazards, he can be covered by one policy, 
but must subdivide the amount of pay roll on these hazards. 

At the end of the policy term the insurance company re- 
serves the right to audit the pay roll of the assured in order 
to ascertain the exact amount expended for labor during that 
period. 

How Premiums Are Figured, 

A contractor's policy is written in all companies for a mini- 
mum premium of $50 per annum. To explain the method of 
adjustment, we will go into detail: A contractor engaged in 
work upon which a 1^ per cent rate is charged has based his 
estimated pay roll for the policy term at, say $10,000. This 
would make the initial cost of his policy $150. Now, we will 
asume that at the end of the year it develops that he has 
actually expended $15,000, or $5,000 in excess of his estimate 
when taking out the policy. The insurance company, in this 
case, is entitled to an excess premium of IJ per cent of 
$5,000, or $75. Had it been found at the end of the policy 
year that the actual pay rolls amounted to only $5,000 the 
contractor would be entitled to a return premium of $75, or 
IJ per cent of the excess $5,000 estimated. The minimum 
premium of $50 applies in cases where the actual pay roll ex- 
penditures multiplied by the rate per cent makes a premium 
of less than $50. The insurance company would then retain 
the minimum premium. 



78 Practical Talks on Contracting 

In figuring up the pay roll accounts, it must be borne in 
mind that where the contractor runs a commissary and issues 
store certificates, etc., in lieu of cash, the value of these credits 
must be included in the actual or estimated pay rolls as com- 
pensation. 

Policies may be written for terms of less than one year 
upon payment of premiums amounting to a certain percentage 
of what the annual premium would be. 

A separate policy may be written for each contract which 
is carried on by the contractor in different towns, or at differ- 
ent places in the same town. When this is done it would be 
well to come to some agreement with the insurer, so that a 
minimum premium of $50 would not apply on each policy 
thus written. 

It often occurs that the assured does not know what he is 
insured against, and this, together with unfamiliarity with 
policy conditions, causes many misunderstandings upon tak- 
ing out a policy. The assured should study the contract thor- 
oughly and acquaint himself with all of the conditions set 
forth in the contract. 

Many claims are made against the insurer which are not 
covered by the policy. Not infrequently are claims filed by 
parties who have been employed in violation of the law; for 
example, employes working on machinery which is not pro- 
tected in accordance with the laws ; minors who are employed 
in violation of the child labor laws of certain states ; convicts ; 
any person or persons whose wages are not included in the 
actual or estimated pay rolls — (they are, however, covered by 
the public liability, but not by the employer) ; any person or 
persons employed in other occupations than those set down in 
the insurance contract, etc. The insurer specifies that such 
cases are not insured against, and will not, under any circum- 
stances, deviate from the contract in this respect; it remains 
for the contractor to defend any suits and pay costs himself. 



Liability Insurance 79 

The Handling of Accidents. 

One of the most important things is for the assured to 
understand the handling of accidents. The insurance com- 
pany furnishes the assured with a supply of forms called 
"accident blanks," which are used in reporting accidents. 
These forms should be given to the foreman or superintendent 
in charge of each contract, with instructions to answer all 
questions on this form in case of an accident, giving full and 
comprehensive answers. The report should be mailed to the 
contractor's home office immediately. If the injury should 
prove to be serious, report should be made by telephone or tele- 
graph, followed by a written report on the form above re- 
ferred to. Should it be impossible to obtain all of the facts 
on the day of the accident, as much information as possible 
should be given on the report and more complete details sent 
later. 

The accident report should be copied at the home office 
and then forwarded directly to the insurance company. Upon 
the occurrence of an accident, the assured or his representa- 
tives should not, under any circumstances, commit themselves 
to the injured party. The terms of the policy, however, per- 
mit the assured to obtain whatever first surgical aid is neces- 
sary; but beyond that he must not, voluntarily, assume any 
liability, expense, or settle any claim except at his own cost. 
It will be understood that the accident report is the only rec- 
ord the insurance company has of the accident. They em- 
ploy a Gorps of attorneys trained to the highest degree in 
negligence cases; and from this report they render to the as- 
sured a decision as to whether he is liable or not for damages. 
In case of liability, more questions may be asked and it is the 
duty of the assured to co-operate in every possible way with 
the company, as their interests are truly mutual. 

Now, as an example, we will assume that an accident has 
occurred and the assured is held liable. The injured party has 
obtained counsel and papers; a summons and complaint are 



80 Practical Talks on Contracting 

drawn up, bringing suit against the assured and in his name. 
These papers are immediately turned over to the insurance 
company, who, at their own expense and with their corps of 
attorneys, defend such suit in the name of the assured and on 
his behalf. The company may endeavor to settle suit outside 
of the courts, and if such be the case, the assured should not 
interfere with any negotiations for settlement or legal pro- 
ceedings, unless authorized by them so to do. Should the 
case be decided against the assured, the insurer will pay dam- 
ages and costs of suit, if the damages do not exceed the limits 
named in the policy. Should they exceed, all in excess of the 
stipulated limits is to be paid by the assured. 

It must be borne in mind that even in cases of non-liabil- 
ity, all papers served upon the assured are to be forwarded 
immediately to the insurer, who will take such action as is 
deemed best. 



Considerations in Estimating 81 



IMPOETANT THINGS TO CONSIDER IN 
ESTIMATING. 

BY A. 0. DAVISON. 

COMPARISON of estimates on all, or nearly all, con- 
tracts of sufficient importance to attract the atten- 
tion of a number of bidders usually shows a very 
great difference between the high and low bidder. In fact 
this difference is so great in many instances that it is neces- 
sary to reject all bids and readvertise the work. There can 
be a number of reasons for this variation, but it usually de- 
velops that the low bidders are contractors who have decided 
to enter a new line of work. In other words, they are bid- 
ding on a class of work, and under conditions, with which they 
are not thoroughly familiar, and on which they have not suf- 
ficient reliable data to base an intelligent bid. It is, also, too 
frequently the case that the contractor does not have his ex- 
penses properly distributed and so arranged that he can profit 
by showings on previous jobs and apply such expense items 
when making his estimate on additional work. 

It is a well known fact that a job of construction work, 
which is of sufficient size to require from eighteen months to 
two years or more to complete, as a rule, will utilize all, or 
nearly all the service that can be secured from a new plant 
equipment. It is, therefore, usually necessary to figure a com- 
plete new equipment of machinery when the job is of sufficient 
size to warrant such an installation and, as so much better 
results can be accomplished from the use of a complete new 
plant, it is, as a rule, more profitable to make such an installa- 
tion than it is to put in important machinery which has been 
in hard service on previous jobs, making repair bills and loss 
from delays so great that the final cost of such installation 
will be far in excess of a new installation. 

The first and most essential thing to be considered in mak- 



82 Practical Talks on Contracting 

ing an estimate on a piece of work is to determine the style of 
plant which is best adapted to the class and location of the 
work to be done. If the contractor has such plant available 
and the condition of it is such that he will be justified in 
using it on the job, he is, of course, in position to figure his 
plant valuation, which should be done by determining the de- 
preciation for previous service, allowing credit to the job from 
which such plant is removed and figuring same in making his 
estimate, adding the cost of transportation, labor and mate- 
rials required for putting same in position ready for operation 
at the new location. In either case, whether he finds it neces- 
sary to purchase a new plant complete or install something he 
already has on hand, by obtaining prices, if new machinery is 
to be purchased, and freight rates in either case to the loca- 
tion where such plant is to be installed, and cost of hauling 
from railroad station, he is in position to determine what his 
installation for plant for the complete handling of the job 
will cost him, having, of course, first determined the best and 
most economical plant in every department for handling such 
work with the greatest rapidity and at the lowest initial and 
operating cost. 

After the expense of plant has been carefully figured, the 
next thing is to determine, from the specifications and plans, 
the amounts and kinds of materials required in the construc- 
tion, and secure prices thereon, together with all freights, 
hauling, etc., which will give him all material costs for every- 
thing entering into the work laid down at the location. If 
the contractor has had previous work of a similar class and 
has kept accurate expense distributions it is a very easy mat- 
ter to apply such expense items, making proportionate addi- 
tions to or deductions from same to fit them to the particular 
job, bearing in mind whether he has made or lost money on 
the job from which such figures have been taken. The follow- 
ing arrangement for listing the items of plant, "overhead" 
expense, etc., necessary to preparing an intelligent estimate 
is suggested in the following tabulated list. 



Considerations in Estimating 83 

Arrangement for Plant and Expense Items in Making 

Estimates, 

If crushed stone is used and the quarry is operated by the 
contractor, this will include: 

1st : Proper equipment for stripping quarry and disposing 
of same, which, according to location, local conditions and the 
contractor's idea of economical handling may consist of : 

Scrapers — drag or wheeled (purchased or hired). 

Dump wagons (purchased or hired). 

Teams (purchased or hired). 

Carts (purchased or hired). 

Harness and barn equipment, or 

Narrow gauge railroad (purchased or leased). 

Dump cars (probably purchased). 

Locomotive (probably purchased). 

Teams in lieu of locomotive (purchased or hired). 

If the narrow gauge road is used and same is purchased 
instead of being leased, the figures must include cost of rails, 
splices, spikes, etc., with freight and hauling charges added, 
ties delivered on the right-of-way, all expense of grading, 
filling, etc., or, in other words, must cover the cost of road 
completely installed. 

2nd: Proper equipment for quarrying and delivering 
stone to crusher plant, probably consisting of: 

Eock drills. 

Boilers for steam supply. 

Tracks, cars and locomotives. 

Carts, horses and harness. 

Hoisting engines, cables, drums, etc. (if gravity tram is 
used). 

^rd: Crushing and mixing plant. 

Crusher. 

Mixer. 

Boilers and engines. 

Elevators and screens. 

Storage and supply bins. 

Erection of bins and buildings. 

Installation of machinery. 

4:th: Equipment for delivering and placing concrete. 

Cableways or derricks. 

Tracks and cars. 

Hand carts or wheelbarrows. 

^th: Additional concrete materials. 



84 Practical Talks on Contracting 

Cement. 

Sand. 

Gravel (if used). 

Freight and hauling. 

If sand is not purchased but secured from a pit or stream, 
proper plant equipment for this operation should be figured in 
addition to the above. 

If gravel is used instead of crushed rock, plant is to be 
figured for this purpose and the quarr}^ plant eliminated. 

^th: Excavating equipment. 

If the quantity of excavation is sufficient, or is required to 
be done at a time or under conditions which will not permit 
the use of the concrete handling plant for this purpose, it will 
then be necessary to figure additional equipment for handling 
the excavation which may consist of: 

Derricks. 

Engines and boilers. 

Scrapers — wheeled or drag. 

Tracks and cars. 

Locomotives or teams. 

'7th: Backfilling. 

It is seldom if ever necessary to figure extra equipment for 
this purpose as the backfilling is usually handled with the 
excavating or the concrete handling plant. 

^tli : Pile driving plant. 

Boilers and engines. 

Hammers and followers. 

Lines, blocks, etc. (original installation). 

Materials for leads, frames, etc. 

Scows (if floating plant). 

Wheels and axles, rails, rollers or skids. 

^th: Pumping plant (where cofferdam work is required). 

Pumps. 

Stocks. 

Boilers and engines. 

Steam and water lines. 

10th: Water supply. 

Pumps. 

Pipe and connections. 

Wells (if necessary). 

Wth: Lights. 

Torches (if used). 

Wiring (if electric). 

D}Tiamos (if furnish own lights). 



Considerations in Estimating 85 

Price from lighting company (if light furnished by light- 
ing company). 

IWi: Blacksmith shop. 

Building. 

Tools and equipment. 

IMli: Office equipment. 

Building. 

Furniture, typewriters, books, etc. 

Engineers' instiiiments. 

l-^itli: Miscellaneous buildings. 

Warehouse. 

Cook camp and dining-room (if furnished). 

Sleeping quarters (if furnished). 

Closets. 

Cement sheds. 

Ibtli: Barn (unless teams are hired). 

Wagons. 

Harness. 

Horses and mules. 

IQth: Fixed or "overhead" expense. 

Superintendent, office force, civil engineers (to be figured 
by month covering term of job). 

Watchman (to be figured by month covering term of Job). 

Water-boys (to be figured by month covering term of job). 

Traveling expense (to be estimated by month covering 
term of job) . 

Telegrams and telephones (to be estimated by month cov- 
ering term of job). 

Office supplies (to be estimated by month covering term 
of job). 

Fire insurance (to be figured from rate on amount car- 
ried). 

Liability insurance (to be estimated from rate on probable 
amount of payroll). 

Interest (if working on borrowed capital). 

The actual amount of producing labor should be carefully 
considered and figured, which can best be done by determin- 
ing the average amount of each classification of work, for 
which returns are received, which it is necessary to accom- 
plish each working day during the term of the job. When 
this is done it is easy to determine the number of men re- 
quired to accomplish the work, and, figuring at the prevailing 



86 Practical Talks on Contracting 

rate of wages in the locality, the labor cost of each classifica- 
tion of work can be arrived at. 

The contractor should bear in mind that the greatest 
economy that can be practiced on construction work is to push 
it to rapid completion and, in this way, relieve himself as soon 
as possible of the "fixed or overhead expense,'' which remains 
the same whether his work is progressing rapidly or dragging. 
With this object in view he should make his schedule of men 
required as large as he can possibly work to advantage, being 
especially sure to see that his gang is large enough to work his 
plant to its full capacity. Properly watched and carried out 
this is the best economy on a job. 

In estimating the time required for the completion of a 
job it is, as a rule, best to figure that all work will be done in 
daylight. Unless the arrangement is ideal there is very little 
chance of figuring a profit on night work. If any work is to 
be accomplished at a profit at night, it is necessary to have the 
job perfectly lighted, and the superintendence must be of the 
best or all expenditures for labor on night work are without 
proper returns. In addition to this there is much greater 
chance for damage to machinery at night, which oftentimes 
causes long delays for repairs during the day, and if anything 
has been accomplished during the night it is more than offset 
by delays caused by damage to plant. It is, therefore, usually 
best to make the estimate based on day work only, and if at 
any time the conditions are right for night work, whatever is 
accomplished by working at night can be utilized as an offset 
for any extreme weather condition which may arise to shorten 
the time figured in the original estimate. 

Night work, as a rule, does not pay and in most cases 
should be eliminated from estimates and done only as a means 
of keeping up to schedule time. 

In making up schedules for arriving at labor costs the 
same arrangement should be followed as outlined above. For 
example, the contractor should figure how many yards of ex- 
cavation will be required to be done each day to complete this 



Considerations in Estimating 87 

part of the work in a given time. After this is determined he 
can figure on the proper number of men and foremen for his 
excavating gangs to accomplish the required amount of yard- 
age each day. These he should figure at the prevailing rate of 
wages, which will show him what his labor expense will be on 
this part of the work, which amount he can reduce to a unit 
basis; this will give him the cost per yard for labor. This 
same method should be followed out in each classification of 
the work. 

The following detailed arrangement for method of keep- 
ing cost of plant and operating expense is taken from actual 
headings used on work now in progress and will show, with 
variations necessary to fit it to any particular job, the head- 
ings that should be used for keeping the proper distribution 
of such expenses. The same headings should be used in mak- 
ing the estimate and then followed out in keeping the plant 
and operating expense on the job, so that proper comparison 
can be made as the work progresses, showing whether or not 
the work is being handled in accordance with the estimate 
made. 

Plant Expense, 

PLANT EXPENSE 

Derricks — Pile Driver — 

(If used — If not. substitute Hammers and followers. 

kind of plant). Timbers. 

Timber and castings. Engines and boilers. 

Cost of derricks. VH^"^ ^^^^^^P^' 

^ . - , -, , T Labor changing. 

Freight and hauling. ^i^.e company team hauling. 

Engines and boilers. 

Labor erecting No, 1. 

Labor erecting No. 2. Building— carpenters. 

Labor erecting No. 3. ^^^^ ^"^"^?^ ^^^ ^ail«- 

T , 4.- -KT A Cost machinery. 

Labor erecting No. 4. ^^,^.^^^ ^^^ j^^^jj 

Labor erecting No. 5. install machinery. 

Labor changing No. 1. Time company teams hauling. 

Labor changing No. 2. Buildings— 

Labor changing No. 3. q^^^ 

Labor changing No. 4. ^ost lumber and nails. 

Labor changing No. 5. Cost furniture and equip- 

Time company team hauling. ment. 



88 



Practical Talks on Contracting 



Sleeping Camps. 

Cost lumber and nails. 

Furniture and equipment. 
Cook Camp. 

Mixer — 

Building — carpenters. 

Cost timber. 

Iron and nails. 

Cost machinery. 

Freight and hauling. 

Install machinery. 

Time company teams hauling. 

Gravel Plant — 

Tracks. 

Cost rails, bolts and spikes. 

Freight and hauling. 

Cost tires. 

Labor, clearing and grading. 

Cost screens. 

Cost timbers. 

Screen and bins — carpenters. 



Labor laying track. 

Cost engine and boilers. 

Freight and hauling. 

Install machinery. 

Time company teams hauling. 

Cost lumber and nails. 

Cost outfit. 
Commissary. 

Cost lumber and nails. 

Cost outfit. 
Barn. 

Cost lumber and nails. 

Cost wagons, harness, carts, 
etc. 
Blacksmith Shop. 

Cost lumber and nails. 

Machinery and tools. 
Tool House. 

Cost lumber and nails. 
Closets. 

Cost lumber and nails. 



OPERATING EXPENSE. 



GruJ)Mng and Clearing — 
Labor. 
Tools. 

Lock Cofferdams — 

Round Files. 

Driving and cutting off. 

Cost piles. 

Freight and hauling. 

Tools. 
Waling. 

Cost timber. 

Freight and hauling. 

Tools. 

Carpenters. 
Sheeting. 

Cost timber. 

Freight and hauling. 

Tools. 

Making. 

Driving. 

Fuel and oils. 
Filling and Banking. 

Labor. 

Tools. 
Time of plant. 
Time of company teams. 

Cofferdam — 

Round piles. 

Driving and cutting off. 



Cost piles. 

Freight and hauling. 

Tools. 
Waling. 

Cost timber. 

Freight and hauling. 

Tools. 

Carpenters. 
Sheeting. 

Cost timber. 

Freight and hauling. 

Tools. 

Making. 

Driving. 

Fuels and oils. 
Filing and banking. 

Labor. 

Tools. 
Time of plant. 
Time of company teams. 
Sand and Gravel — 
Tracks. 

Repairs and changing. 

Tools. 
Labor, digging and loading. 
Operating cars. 
Repairs to cars. 

Tools. 

Fuels and oils. 
Time company horses. 



Considerations in Estimating 



89 



Concrete — 
Materials. 
Cement. 
Cost. 
Freight. 
Hauling. 
Sand and gravel. 
Royalty. 
Making. 

Operating mixer. 
Repairing mixer. 
Fuel and oils. 
Tools. 
Operating cars. 
Repairing cars. 
Handling cement. 
Placing. 
Labor. 
Tools. 

Time plant. 
Forms — 
Lumber. 
Nails and iron. 
Tools. 
Labor building, placing and 

removing. 
Time of plant. 
Excavation — 

(If derrick used — If not, sub- 
stitute kind of plant). 
Labor. 
Tools. 

Time of derricks. 
Operating derricks. 
Operating No. 1. 
Operating No. 2. 
Operating No. 3. 
Operating No. 4. 
Operating No. 5. 
Repairs No. 1. 
Repairs No. 2. 
Repairs No. 3. 
Repairs No. 4. 
Repairs No. 5. 
Oil and fuel. 
Backfilling — 
Labor. 
Tools. 
Time plant. 

GENERAL 

Ground rent. 
Liability insurance. 
Fire insurance. 
Telephone and telegraph. 



Main Boiler Plant — 

Labor. 

Repairs. 

Tools. 

Fuel and oils. 
Pile Driver — 

Labor, driving and cutting oflf. 

Operating engine. 

Tools. 

Lines, blocks and supplies. 
Blacksmith — 

Material. 

Coal. 

Tools. 

B. and H. labor. 
Credits. 
Barn — 

Repairs wagons, carts, bug- 
gies and harness. 

Feed and bedding. 

Hostlers. 
Credits. 

Pumping Cofferdam — 
Fuel and oil. 

Operating pumps and boilers. 
Repairing pumps and boilers. 
Time plant handling. 

Lights — 

Labor. 

Oils. 

Lanterns and lamps. 
Water Line — 

Labor laying and changing. 

Tools. 

Lumher Supply Account — 

Cost. 

Freight and hauling. 

Handling and unloading. 

Time company teams. 

Time plant. 
Credits. 
Sawmill — 

Fuel and oils. 

Tools. 

Labor. 

Time company teams. 

Repairs. 

EXPENSE. 

Traveling expenses. 

Livery. 

Office supplies. 

Bond. 



90 Practical Talks on Contracting 

MISCELLANEOUS. 

Cook and flunkies. * Floods. 

Camp. Helping engineers. 

Handling supplies for com- Office salaries and superin- 

missary. tendents. 

Watchman. Water boys. 

Pick up tools. 

After a complete list of requirements for plant, warehouse 
and buildings of various descriptions has been listed and 
priced and the approximate number of foremen and men fig- 
ured to handle and complete the work within a required time, 
the material and labor expenses should then be definitely 
arrived at, proportioned under each classification of work re- 
quired to be done and in this way a reliable operating expense 
covering the complete quantities of the work can be arrived 
at. This should then be reduced to a unit price, which will 
give actual operating expenses per yard, feet board measure 
and any other unit prices which are required to be figured 
on the work. After all of the operating expenses have been 
taken care of in this manner and reduced to a unit basis, the 
complete plant should be gone over and reduced to a unit basis 
and added to the unit price for the operating expense. To 
this amount should then be added all overhead expense, pro- 
portioned in accordance with the quantities of the various 
classifications. In figuring operating expenses it is very im- 
portant to take into consideration the small tools and supplies 
needed for each division of the work. 

In quarry operations it is essential to figure powder, d}Tia- 
mite, fuel and oil for engine and machinery, feed and care of 
horses and mules, if used, etc. 

In the case of a crusher plant it is also necessary to figure 
fuel, oil, repairs, etc. 

In the placing of concrete should be figured small tools, 
repairs, etc. 

If sand and gravel is used from pits where it is necessary 
to pay royalties, this item of expense should be figured in with 
the concrete materials. 



Considerations in Estimating 91 

Forms for concrete should be very carefully figured, in- 
cluding sufficient lumber, iron, nails, etc. 

Expense for setting, removing and resetting should be 
included, also a proper allowance for at least 25 per cent of 
the forms having to be rebuilt, owing to some being destroyed 
in removing, handling, etc. 

In case of pile-driver operations, fuel, oil and repairs 
should be figured in the operating expenses and cost and 
quantity of piles delivered on the ground, making a reason- 
able allowance for culled piling. 

In pumping-plant operation, allowance must be made for 
fuel, oil and repairs. 

Water supply operating expenses should also include fuel, 
oil and repairs. 

The operation of lighting plant, where oils and gasolines 
are used most, include proper allowance for such oils and 
gasolines. 

After all allowances have been made for materials, labor, 
plant, tools, repairs, etc., and reduced to a unit price basis, a 
proper amount for profits should then be added and an extra 
allowance made for taking care of things that can not be fore- 
seen when figuring the estimate and these figures used in 
making the estimate. 

When an estimate on a job of work has been properly made 
up and the quantities arrived at which it is necessary to 
accomplish each day, the contractor will find it profitable to 
have "foremen's meetings" at least once a week, at which 
meetings the foremen are advised as to the progress of that 
part of the work of which they are in charge. All foremen 
should be given to understand that they are personally respon- 
sible for the amount of work accomplished by their men ; they 
should be furnished with a schedule showing the amount nec- 
essary for them to accomplish each day, and a good plan is 
to offer a bonus monthly for accomplishment of certain per- 
centages over the schedule. At the weekly meetings these 
matters should be taken up and discussed, the schedules 



92 Practical Talks on Contracting 

changed if delays have occurred which require a change in 
the schedule, and proper credit given the foreman and his 
men for all work done in excess of the schedule. If a bonus 
plan is adopted it should extend to the men as well as the 
foremen. The foremen should be advised that they have an 
interest in the economical handling of the work and made to 
feel that they are a part of the organization. They should 
be consulted on methods and changes necessary to facilitate 
the work and allowed to express their ideas, which, if found 
beneficial, should be adopted. In this way the foremen and 
men are kept enthused, they feel that they are a part of the 
organization, a competitive feeling is aroused and the work is 
highly benefited. 

In another article the method of handling and distribut- 
ing in detail the items of plant, expense, etc., is given and 
fully illustrated with plates, showing a convenient manner 
of arranging same to enable the contractor to have a full de- 
tailed distribution of all such expenses. A system of this 
kind, if properl}^ carried out at the termination of the job will 
have all expenses so distributed and arranged that they can 
be taken and applied on estimating new work with very little 
rearranging, the only thing necessary being additions or de- 
ductions to fit them to the differences in locations and local 
conditions, which may exist between the two jobs. All items 
of plant, material and expense, when properly kept and dis- 
tributed at the completion of a job will be arranged in a man- 
ner as outlined in this article from which it will be seen that 
the matter of their application to new work is merely a ques- 
tion of the differences between the conditions of the two jobs 
after the proper allowance has been made for the profit or 
loss, which may be shown by such figures taken from the job 
previously completed. 



Purchasing Records 93 



PUECHASING EECOEDS FOE CONTEACTOES. 

BY C. ARTHUR WORDEN. 

OXE of the essentials of contracting, and yet a point 
which is often overlooked, is that of purchasing 
material and supplies. It is a science the same as 
engineering or any of the other kindred professions. It is as 
important for the contractor to know the science of purchasing 
as it is for him to figure correctly and intelligently the costs 
and quantities in his estimates. The one is not complete 
without the other — he cannot hope to obtain success, even 
though an experienced contractor, unless he has a thorough 
knowledge of purchasing. It is one thing to get a contract 
and then another to "make good" on it. The ability to "make 
good" depends to a great degree upon the quality a contractor 
exercises as a purchaser. 



CEMENT NEW YORK, R. Y. 



Edison Portland Cement C o. D-47 

1133 Broadway 



■ J i az a r e th Cement C o. C« 5 



209 Fourth Ave. 



Fig. 1— Manufacturers' and Dealers' Record. 

To obtain the best results, the purchaser should be a 
reader of human nature. This, coupled with common sense, 
a knowledge of the market and system in his work, form the 



94 



Practical Talks on Contracting 



essentials of good purchasing. The reading of human nature 
is a point in which very few people qualify. It will be found 
that the field in which the purchaser works affords a great 
opportunity to exercise this art. He must know his man and 
use tact in his dealings with him. Every salesman has a store 
of information which will prove of value to the one who has 
the duties of the purchasing agent, and this may be obtained 



C^^y,^j^.g.t^^<^%»',^uu.:^ 1 


MTC 


N « M C 


ORICI 


ocLivenv 


•CMAUK* 




/ 


fn 


Ay?^^JM 




iu(<!t 


f\ a^.J^.-'JlJ^j CRtr^^4^ Ga 


/ 


'h 


,, 






(f 




' 































































































































Fig. 2— Quotation Card. 



by a study of the man, his weak points and his strong ones. 
It is well to cultivate the friendly acquaintance of the man 
with whom you have this class of business dealings. This 
acquaintance will often do more than all other measures in 
obtaining information of value, and material that is satisfac- 
tory in cost and quality. There are so many different grades 
of any one article on the market at present that it is a diffi- 
cult matter for the purchaser to keep in close touch with each 
brand or manufacture. This is an "age of substitution" when 
every one has an article which is "just as good if not better" 
than his competitors. The friendly acquaintance of a sales- 
man, in that particular line, w411 bring to you the knowledge 



Purchasing Records 95 

and opinions of an expert, who will deal with the subject in 
question honestly. 

Common sense, which is one of the chief factors in engi- 
neering, is applicable here also. To "know what is right, then 
to go ahead/' to know that prices made are as low as can 
be obtained; to know that the "flowery words'' of this or that 
salesman have not added to his prices because he has seen that 
you were being brought over by the strength of his argument, 
regardless of price, and to know that you are getting what 
you want. It must be borne in mind, however, that prices 
fluctuate and especially when subjected to strong competition. 

Kjiowledge of the market as it probably will be three 
months from now is not of great importance to a contractor 
handling jobs which last only a few months, but to the general 
contractor for big work which may extend a year or more, it 
means much. He may be able to buy a small quantity to carry 
him for a month or two and buy the balance at that time, at 
lower prices, or he may think the market is going up and buy 
all at once. 

Now to deal with the system of purchasing. There are 
many forms, yet few which can be used by the contractor with 
satisfactory results. It is better to consider these various 
forms in the order of their use. Card indexing is strongly 
advocated. 

The first record necessary is that giving the names and ad- 
dresses of all manufacturers of and dealers in contracting ma- 
terials. A simple card index drawer with a plain card, say 
3 inches by 5 inches ( Fig. 1 ) , is used in this case. Guide cards 
are made out, giving the name of each kind of material used, 
i. e., sand, gravel, stone, cement, lumber, etc. — back of which 
are to be filed the small index cards, arranged geographically, 
according to classification of material, with the names of the 
manufacturers and dealers noted thereon, under the proper 
locality. It will be seen that the name of a supplier of any 
article and in any locality can be obtained immediately by this 
method. To obtain the names, in the first place, it is well to 



96 Practical Talks on Contracting 

review the "Index to advertisers" appearing in any of the 
contracting or engineering periodicals. In this connection, 
also, it is advisable to obtain the catalogues and pamphlets of 
the parties whose names appear on this list. 

The filing of catalogues is a serious matter, at the present 
time, due to the fact that they are not uniform in size. One 
system, however, which has been found very satisfactory, is 
to divide the catalogues into, say, three or four different sizes, 
and letter them A, B, C and D, respectively. Each size is 
then numbered numerically beginning with 1, and filed in 
compartments of an open section filing cabinet — each letter 
being filed on a different shelf. To gain access to any cata- 
logue when desired, the file number should be noted on the 
dealers' index described above. This acts, then, as a cross, or 
double, index record, as it will give the names of the articles 
and dealers, together with the catalogue file reference, making 
it a very easy matter to obtain any catalogue at a moment's 
notice. 

After quotations have been secured, they will be noted on 
a quotation card as shown in figure 2. This card, size 4 inches 
by 6 inches, is filed in a separate drawer, back of a guide card, 
describing the article quoted upon. The letters giving quota- 
tions may be filed permanently in a vertical file or an ordinary 
box file. In the former case, a folder is made out for each 
article, while in the latter case, owing to its size, several 
articles may be filed in the same file. 

Now we have come to the final results of our purchasing 
system — the order. All previous records have been kept in the 
contractor's office. This record must be made in quintuplicate 
for distribution outside of the home office as an order and also 
as a means of checking material received. The different copies 
will be called "Original Order," "Office and Purchase Kecord," 
"General Superintendent's Record," "Receiving Slip," and 
"Field Office Record." "The "Office and Purchase Record" 
is printed on a lightweight card which is to be filed in a small 



Purchasing Records 



97 



ORDCn NO. 



948 



April 27th. .„„e 



Nazareth Cement Co., 
289 Fourth Ave. 



N. Y. City. 



JOHN DOE CO. 

ENGINEERS AND CONTRACTORS 
NEW YORK 



500 barrels ''Nazareth'' Portland Cement, in cotton sacks, at fl.47 
per barrel, at mill. 

Coiton eacks to be returned in good condition, and are subject 
to a rebate of 7 1/2' cents on each aack so returned. 



Send OHiJn&l and dupllosfe Bills of Lading, Also Itemized Invoice when shipme 
Ho boiling or crating charges allowed unless so 


•\t 19 tnade complete. Put order number on Involo*. 
specified on order. 


Ship Via Penn. R. R. F.O.B. Nazareth, Pa. 
Ship 10 John Doe Company, 


JOHN DOE CO. 


c/o Pennsylvania Steel Co. , 


By ^.S^.ytcrJen 


Pittsburg, Pa, 






i.DErAI.11 ^..yO RF.niKN TU 


t/i) 



Kirdn No. 948 



acknowleogm!:nt StIP 



New York, May 2nd. 

H^e /lave this day compUud slupmrnt on your 
Penn. n_ y<. Qo. 
Exp. Co. NAZAR ETH CEME N T COMPANY. 

li£7/f(..V .i.\:j Kl- IVKS 10 Ui) 



New York, April 29th. 



fVe aeknowter/^e recti pi of your order No. 948 grid vW 

thtpfrom Nazareth, Pa. ■^jja Penn. R. R. „„ M ay 2nd. 

This order tt executed in accordance with conditions stated. 

NAZARETH CEMENT COMPANY. 



Fig. 3— Original Order. 



ORDER NO. 



d48 



April 27th. 



Nazareth Cement Co.j 

289. Fourth Ave. , N. Y. City. 



OFFICE AND PURCHASE RECORD 

JOHN DOE CO 

NEW YORK 

Freight »69.40 franspin p'd by J-D. 

Express %^ Date Rec'd 5/8/08 

Cartage^ Checked by J. D- 



500 barrels ''Nazareth'* Portland Cement, 'in cotton sacks, at ^1.47 
per barrel, at mill. 

Cotton sacks to be returned in good condition, and are subjeot 
to a rebate of 7 1-2 cents on each sack so returned. 



Ship via Penn. R. R. F.O.B. . Nazareth, Pa. 
Ship to John Doe Comdany , 



c/o Pennsylvania Steel Co., 



Pittsburg, Pa. 




Order Completed }^^^l^(2^ 



Invoice Checked by ^' S. C- 

D<(/fJlay 10/08 

Viuchir .\'o. 724 



Fig. 4— Office and Purchase Record. 



98 Practical Talks on Contracting 

vertical file at the home office. Ordinary paper of lightweight 
may be used for all other copies* 

Figure 3. — The "Original Order," is mailed to the party 
furnishing the material and bears at the bottom two stubs. 
The first stub is immediately detached by him and is returned 
to the contractor. It acts as an acknowledgment of the order, 
and also advises full information as to probable date of ship- 
ment and its routing. This information will prove invaluable 
in "following up" the order, and should be obtained in each 
case. The second stub is returned at the time of completion 
of the order, and should be accompanied by original and dupli- 
cate bills of lading, together with invoice covering the ma- 
terial shipped. The main body of the Original Order will 
give to the shipper the list of material required and all other 
information necessary in fulfilling his contract. In some 
cases, the list of material required is too large to be written 
on the order — it is then printed on another sheet and attached 
to the order, the order being marked in that case, "Material 
as per list attached." 

Figure 4. — The "Office and Purchase Record," as far as 
the order itself is concerned, is an exact copy of the original. 
As this record is placed in a permanent file the order number 
and address of the supplier appear in the upper left hand 
corner, thus enabling one to locate it very easily after it is 
filed. Blank spaces are provided in the upper right hand 
corner for the insertion of the amount of freight, express or 
cartage paid, date material was received, name of party check- 
ing same, together with the name of the party who paid the 
shipping charges. This information is noted on the Office and 
Purchase Eecord as soon as the Eeceiving Slip is received 
from the field office, and enables the home office to locate any 
discrepancy, should one occur. The lower right hand corner 
provides for the date of completion of the order, name of 
party checking invoice, date same was checked and the num- 
ber of the voucher by which payment was made. The voucher 
number is a mere record as the Office and Purchase Record 



Purchasing Records 



99 



should give all information relative to the transaction. In 
charging the "cost data" with this order, we refer to the lower 
right hand corner for the proper charging. 

Figure 5 shows a typical cost data sheet and the manner of 
entering an order on same. Sheets are provided for each 
item of the contract, such as excavation, timber, concrete, 
forms, etc. The charges on this sheet appear in two separate 



PENNSYLVANIA STEEL COMPANY CONT. /ir45I 



/4^(?f 



CONCRETE 



^ 



/ o 

/ f 

/ ^ 







fys 



7^ 




y 3.5 oo 



€f 



200 



^c 



GO 
GO 









Fig. 5— Cost Data Sheet. 



ORDEN NO 

Nazareth Cement 
289 Fourth 


Co., 
Ave. 


DATE 

, N. 


Apn 
Y. Ci 


1 


27th. 


_I90 


8 


Freight 
Exprcis 


869 


RCCeiVING SLIP 

JOHN DOE CO. 

NEW YORK 

• 4 transp't'n p'd by J • D • 

Date Ree-d 5/8/08 






















Cartage 


% 


Checked by J. 


D. 



500 barrels * 'Nazareth'' Portland Cement, in cotton eacks, at J1.47 
per barrel, at mill. 

Cotton saeka to be returned in good condition, and are aubjeot 
to a rebate of 7 1-2 cents on each sack eo returned. 





Charge to Concrete 




.. 




.< 






Ship via Penn. R. R. F.O.B. Nazareth, Pa. 
Ship to Joftn Doe Corapany , 


Check, carefully, all material as soon as received, 
aeui return this slip to the Home Ojfiie at ajue, 
properly fiUed out. Use reverse side for detailed 


c/o Pennsylvania Steel Co., 


Pltlobarg, Ps. 


itiUiment ifiucessury. 



Fig. 6— Receiving Slip. 



100 Practical Talks on Contracting 

columns, the one on the left for piaterial charges, and that on 
the right for labor (which is taken from the Daily Eeport 
each day). If it is desired, at an}^ time, to find the cost to 
date of either material or labor, or both, it may be done by 
adding up the columns. This data also proves invaluable at 
the time the work is completed in checking up with the 
estimate the actual cost of each item, and in ascertaining the 
profit or loss on the contract. 

The "Field Office Eecord" is the same as the Eeceiving 
Slip with the exception that in the lower right hand corner, 
the date Receiving Slip was mailed to home office is noted. 

The "General Superintendent's Record'^ is a blank copy of 
the order which is given to him as a memorandum that the 
material has been ordered. 

Figure 6. — "Eeceiving Slip" is sent to the field office at 
the time the material is ordered. This is also an exact copy 
of the Original Order and is used in checking up the material 
received. Provision is made on this record for noting the 
freight, express, cartage, etc. This information, together with 
notes of any discrepancies or over shipments, is written on 
the slip and the slip is then mailed to the home office imme- 
diately, where all information is noted on the Office and Pur- 
chase Record to which this slip is attached, until the invoice 
has been checked ready for payment. The slip is then attached 
to invoice and they are both filed in the voucher as a perma- 
nent record. 

As a permanent file for the Office and Purchase Record, a 
box file should be provided with guide cards marked as fol- 
lows : "Ordered," "Received" and "Checked." Back of guide 
card marked "Ordered," is filed the office copy of each order 
as soon as same is made out. When the Receiving Slip is 
returned to the home office, it is attached to the Office and 
Purchase Record and both are filed back of guide card marked 
"Received," until the invoice has been checked. After check- 
ing the invoice, the Receiving Slip is attached to the voucher 
as already described and the Office and Purchase Record is 



Purchasing Records 



101 



filed back of the "Checked'' guide card, in numerical order, 
where it remains. 

Figure 7 may be used as a "follow-up" card for orders. At 
the time an order is given, one of these cards is made out, 
bearing order number, name of party with whom the order is 
placed, address, date and contract number. The card is then 
filed in a "daily reminder" file under the date when the ac- 



OROCR NO. 



.f/^f 



PUCEO WITH 



CONT. NO. ^S/ m- NO. ///< 



y COMPttTEO ^f/>/0Y 



7(4/ CCA^. 




ADDRESS 



M^ 



^Ziie 



ORDERED 



^auifi 



CORRESPONPgWT 



MATERIAL r^^On "1^t^!tr^^Jtjt^y 



ytj^-^l^rTy^ 



C^l'f'r^..aci^ 



'^i'^^etyy^^C^ 



WUOWEOUPJ^^t;?^ 



"^^ML 



:^^ 



DATE ACKNOWIEDGMENT SLIP 



m 



f HEIGHT- EXPRESS 



SHIPMENT ASKED FOR . 



PROMISED 



tT^Ls^ 



"T-i^^C 



COBPIETE fttM»AWMt-. 



^ ^V^ 



OATEOE SHIPMENT 



SHIP'G PAPERS 



£:fo. 



^/^oi 



DUE AT DESTINATION, 



REQUEST fOR TRACER 



-^^/<rf 



v?/(rf 



MATERIAL RECEIVED 



FOR DETAIL OF PARTIAL SHIPMENTS. SEE ORDER. 



rO'u «, (EE OTHES «>I>E fOA MHOOtNOuH 



Fig. 7- Follow-up Card. 



knowledgment of order should be received. If not acknowl- 
edged promptly, a follow-up letter or post card is mailed. 
On receipt of the acknowledgment, date of same and also 
date of promised shipment is noted on the card. The card 
is then filed under date shipment should be made, when, if 
the "complete shipment" stub is not received, another follow- 
up inquiry should be mailed. The date of all "follow-ups" 
should be noted on the card as an aid in case of any future 
controversy. 



102 Practical Talks on Contracting 



TOOL AND EQUIPMENT EECORDS. 

BY C. ARTHUR WORDEN. 

THE problem of keeping correct records of tools and 
equipment and their value is a serious one in con- 
tracting where the tools are scattered among many 
contracts. 

The writer has asked many contractors for a satisfactory 
method of keeping such records^ and the response, in each 
case, has been that they had no fixed system, or that they 
knew of no system. When asked how depreciation should be 
calculated, the answer, in a majority of cases, was "about 10 
per cent should be taken off annually." Some English author- 
ities have fixed the standard at 2 per cent, which is entirely 
too low. Upon investigation, it will be seen that the deprecia- 
tion of some tools will run as high as 50 to 100 per cent per 
annum. In figuring depreciation, it must be taken into 
account that the care exercised in handling tools and the wear 
vary greatly among the different gangs of men employed ; this 
would naturally tend to vary the amount of depreciation. 
Some writers consider it wise, when considering machines 
which are continually being brought to a higher rate of effi- 
ciency through improvements, to determine the approximate 
life of such machine and to calculate a certain amount as 
depreciation per annum which will extinguish the cost at 
the estimated period. This is all very well, but as circum- 
stances will vary from year to year, and from job to job for 
that matter, this rule can hardly be taken as a standard. 

In the writer's opinion, the best way to ascertain the de- 
preciation chargeable is to make an accounting upon comple- 
tion of each contract. The value of this is shown as follows : 

Tools and equipment are either charged to "Tools and 
Equipment Account^' in the general ledger, or to the various 



Tool and Equipment Records 103 

contracts. In the first case, if a periodical and accurate ac- 
counting is not made, this account will continue to increase 
until it is out of all proportion to the actual value of the tools 
possessed — or in other words, losses will be carried as assets. 
In the latter case, the contracts themselves will show a higher 
cost than is actually true, and future business is seriously 
affected, due to higher estimates being made on account of 
past experiences. 

In either case, the result eventually reverts back to the 
^Trofit and Loss i^ccount/^ and that account, therefore, is 
seriously affected. 

Upon careful study, the writer believes that a system sim- 
ilar to that shown in the accompanying figure would not only 
give an accurate listing of the various tools and equipment, 
but would eliminate, to a great degree, the uncertainty met 
with in calculating depreciation. It may be the claim of some 
that the system would be too elaborate, but that is hardly 
true. The labor involved in keeping such a system up to stand- 
ard would be more than repaid by the results obtained. The 
object would be to give each tool a number, and a card in the 
home office bearing the same number, together with a "his- 
tory" of the tool. If this was thought unnecessary, due to 
many tools being in use, a certain number of any one kind 
could be treated collectively and shipped from contract to 
contract together. 

As a matter of illustration, we will consider a wheelbarrow 
and see how the system operates. We will also assume that the 
tools are to be charged to the contracts as in the second case 
cited above : 

On January 24 a wheelbarrow costing $4.00 was purchased 
for use on contract No. 730. The home office will assign to 
this barrow the number "45," and that number will be branded 
on the equipment. Where a branding iron can not be used 
a cold cut or a stencil can be substituted. The home office 
will note in the proper column, as shown, the number of the 
contract upon which the barrow is located, date of purchase. 



104 Practical Talks on Contracting 

and original cost. In this case, the initial cost will be charged 
against contract No. 730, and may be considered as a tempo- 
rary charge only, as there will be salvage when the contract 
is completed. Upon completion of this contract, the barrow 
is ordered shipped \vith other tools to contract No, 740, and 
the superintendent will report that shipment has been made; 
that the barrow is in good condition and worth at least, we 
will say, $3.00. We will therefore credit No. 730 with the 
$3.00 present value, leaving $1.00 against the contract as a 






^ 






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Z><p/& 



C^on^i // o r> 



Va/^ue 



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^ 



oo 



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OO 



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^(Z/L, 



<X/\^^ 



^ 



fl^^^h^^Le^ A^LdJiJ^^i^ -^in^/ -^yyJ^-txjU- "l^^O^ 



Record Card for Tools. 



permanent charge to cover use or depreciation. Contract No. 
740 is, in turn, charged with the $3.00. The card in the home 
office which was filed behind a guide card bearing the words 
"Contract No. 730" is now taken out, notations made thereon, 
and filed behind a guide card marked "Contract No. 740." 
Perhaps the use of the barrow on contract No. 740 has been 
very little and the depreciation not as great as on the first 
contract. Upon shipment being made to another *con tract, we 
are advised that the barrow is still in good condition and 
worth at least $2.50. Contract No. 740 is charged with the 
depreciation, or in other words, 50 cents, and a credit given 
for its present value of $2.50, which becomes a charge to the 



Tool and Equipment Records 105 

next contract. In this way the "history^^ is repeated, and 
eventually the original cost is wiped out entirely by deprecia- 
tion. "Tools and Equipment Account" is not burdened with 
any charge due to the purchase, but the various contracts have 
shared the cost in proportion to the amount of service rendered 
by the barrow. 

Card No. 45 at the home offijce is filed numerically behind 
the guide card describing the contract upon which the barrow 
can be located. The system, therefore, is rendered flexible 
and at any time a complete list of tools, with their present val- 
uation, can be made up for each contract. 

Had this barrow been shipped, we will say, from contract 
No. 730 to the company^ s general storehouse, we would charge 
"Tools and Equipment Account" with the present value, 
$3.00, and credit that account with a like amount when the 
barrow was shipped to another contract. "Tools and Equip- 
ment Account," therefore, would show the valuation of plant 
lying idle in the company's storage. 

When equipment is purchased locally by the field office, 
the superintendent notifies the home office description and 
cost. The home office will assign to this new equipment a 
number and the records will thereafter be kept as described 
above. 



106 Practical Talks on Contracting 



CONTEACTOES^ DAILY EEPOETING SYSTEM. 

BY C. ARTHUR WORDEN. 

ACONTEACTOE must, of necessity, contend with 
many difficulties in the daily routine of his work; 
yet these may be reduced to a minimum and better 
results obtained through the use of system. One difficulty 
is the daily reporting of progress made on contracts. 

Figure 1 shows a daily report, which, owing to its flexi- 
bility, may be used on any class of construction work. These 
reports are made in book form, with one white and one colored 
sheet arranged alternately throughout. The white sheet is 
perforated near the binding so it may be torn from the book 
and sent to the home office each day. The colored sheet is 
retained by the field office for record. 

The first column to the left in this report shows the num- 
ber of men employed. All men obtaining the same rate per 
hour appear on the same horizontal line. In the body of the 
report, divided by vertical lines, will be found the sub-division 
of the contract to which the labor is to be charged. To the 
right is the total number of hours of each gang, together with 
their rate and the total labor cost per gang per day. 

This form has been used with the names of the various 
sub-divisions of the contract printed in the space at the top 
of the vertical lines, such as "Excavation," "Forms," "Con- 
crete," etc. As a contractor will handle many different classes 
of construction work, it would be necessary in this case for 
each contract to have its own daily report form. It is advis- 
able, therefore, to have reports with letters of the alphabet 
substituted in place of the various sub-divisions noted above; 
and upon starting work on a contract, to take each item esti- 
mated upon, and give it a letter of the alphabet, for instance : 

A, Earth Excavation, 



Daily Reporting System 



107 



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108 



Practical Talks on Contracting 



Job. 



No. 744 



Dptp July 2, 1908 



PROGRESS REPORT. 



NUMBER OF MEN EMPLOYED ON THIS DATE. 

Carpenters, Laborers, 17 

Mechanics, 

Helpers, 



WHAT PARTS OF CONTRACT ARE UNDER CONSTRUCTION AT PRESENT? 

Earth and rock excavation ; laying concrete near old building. 

WHAT PARTS WERE COMPLETED SINCE LAST REPORT? 

Form work near old building. 

WHAT PARTS WILL BE STARTED WITHIN NEXT 24 HOURS? 

Cutting and framing timber for bents Nos. /, 2,3 and 4; removal of forms 
and continuance of excavation work near upper end of building site. 

IF WORK IS BEING DELAYED, STATE CAUSE AND EX'lENT OF DELAY. 

Was delayed this morning because architects'' engineer had not laid out 
stakes near betits 10 and 11. 

WHAT MATERIAL IS PARTICULARLY NEEDED AT THIS TIME? 

(State order number and date of requisiton.) 
Will need yellow pine for superstructure by the 6th. Please rush. 

I Have Ordered the Following Material Today: 



MATERIAL 


FROM WHOM ORDERED 


charge to 


price 


Vz doz. square point 
shovels. 


Strong Hdw. Co. 


Plant 


Sj.oo 




































Do not report above the purchase of any material you have paid for, but 
note same under "Cash Expenses" on other side. 

the following material RECEIVED TODAY: 

Vj doz. shovels, noted above. 



Remarks:— 

The work is proceeding very nicely at present, but if material is not rushed 
through to us there will be danger of a tie-up. 

J. D. cox. 



Foreman. 



Fig. 2— Backof Daily Report. 



Daily Reporting System 109 

B, Eock Excavation. 

C, Concrete, 

D, Forms, 

E, Concrete Sidewalks, etc. 

It will be readily seen that this system meets the require- 
ments of any contract. 

On the accompanying form, the alphabetic system has 
been adopted, and a description of its operation follows: 

On July 2, Contract No. 744, 10 men were employed at 
the rate of 19 4-9 cents per hour, their time being distributed 
as follows: 54 hours on A (earth excavation), and 36 hours 
on B (rock excavation) ; making a total of 90 hours at a cost 
of $17.50. The men receiving different rates appear in the 
same manner, and we find that the total labor cost on that 
date amounted to $35.50. The expenses are noted at the bot- 
tom of the sheet, and distributed according to class of work, 
the same as labor. On this date, the foreman purchased nails 
for use on forms and same appears on report as an expense 
charge against item D, which, together with general expenses, 
brought the grand total up to $43.25 for the day. 

The vertical columns are then footed up so as to show the 
total cost of each item for the day. The total of these columns 
should check with the first total already found, namely $43.25. 
The various sub-totals thus found are charged, when the report 
is received at the home office, to the cost data covering this 
contract, according to the various sub-divisions. 

On the reverse side of this report, Figure 2, appears the 
progress report. The object in having this form arranged as 
shown is to remind the foreman or timekeeper each day of the 
facts which the home office are in need of to intelligently 
understand the conditions on the job. 



110 Practical Talks on Contracting 



EAETHWOKK EECOEDS. 

BY C. ARTHUR WORDEN. 

THE accompanying figures show systems used for re- 
cording costs on earthwork contracts, which have 
met with very satisfactory results on both straight 
and cost-plus-percentage contract work. 

On account of their simplicity, very little need be said in 
describing them. It was originally intended that Figure 1 be 
used as a weekly report in conjunction with a daily report 
previously described; however, it may be used in conjunc- 
tion with any daily reporting system. In instances where an 
engineering force is with the excavating gangs, so that meas- 
urements can be taken daily, this report may be used as a 
daily report. 

It will be noted at the top of the sheet, spaces are pro- 
vided for a record of the quantities entering into the work. 
These quantities, together with the "Labor and Cost Account," 
should be kept very accurately, for they, naturally, affect the 
cost data. In the cross section shown in the upper right hand 
comer under "Ditch No." should be sketched the material 
found, giving approximate thickness of strata. In the center 
of the sheet, at the left, appears the labor cost, including team 
hire for each class of work, as noted under "Quantities." In 
case of sheet piling, or other material charges entering into 
the work, the columns at the right would be used. 

In road building or canal work, where the contractor op- 
erates a quarry and stone crushing plant in connection with 
the excavation contract, Figure 2 would be made an inde- 
pendent report. This form has been used by large quarry op- 
erators in the east. 



Earthwork Records 



111 





Week Endinc_-^'C^^^»-^^ :2"?'-/iC/\Qo^ 


SUONTITltS 


1 

wecK 


PHtViOUS 


TOTAL 


CONTRACT 

paicc 


DITCH No 


Grubhina i. CUarlAa 


fo-jfSii, 




/crj/So 




\ / 




7ca 




loo 




\ / 


sun Earth 










STATION No. 
























Character of Land 


7?'£es 


ih 




if-y 
















Complated 


LABOR AND COST ACCOUNT Foroman 1 


CLilSSIFtCATION | 


HOUBS 
MEN 


B.T. 


-ST --I 


HATE 


COST MATERIAL 


HATt 


COOT 


TOTAL 
COST 




C^^J^-i<^ 


irr 


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36,7/ 


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. : , 11 . 

REMARKS. 


/^^^ 


.PPBOVE* ^-V:Z ■ ^^^^^^^^^-^^^^^^^ 


j^ ^ 



Fig. 1— Weekly Excavation Report, 



112 Practical Talks on Contracting 



DAILY REPORT FROM QUARRY I«o. 

Weather - ., Paterson, 3^. ^.. 



.190 



Operated atr plant ; Hrs- 

•' No. 1 Crusher •• " 

xo.2 •' ; " 

Blasted ....Bench holes: o'clock 



.Vo. 1 Dnll Feet. .. 

A'o. S " .... " 

Blastetl Block holes. 



Mrs. 
.o'clock 



Quarrying and Mitlins: 












. y 


iscellaneous 








Oceupadon 


.\o 


Hjj 


Halt 


Amount 


To 


at . 


Orcupatfon 


Ko. 


Jlis. 


Itirt' 


Amanut 


■Jolat 








... 


.... 


— 




I'.: 


Carts Hauling Dirt . 



















Drivers ". *' 
Men ■ '" . . ", 











Zlachme btk drlrs .. 
Hand " 






— 








Baring .-.". 

Sleduinfi 


Carts StocK'g Stone. 
Drivers " " 
3Ien " '." 

Carts reUiad'g Htone 
Drivers . " " 
Men " . . 'V 

Corts loading cms 
Drivers " ■• " . . 
Men - V " . 


-■••• 


'.... 


■"••" 


.::. 


-•■ 


.... 


.-.^ 


Loading 












■••- 


Horses havliny cars, 
liriters " 

Caiis haufy to mill 
Drivers " , " 








f. 


,.■.■..■ 




.... 


'•• 





.— . 


..... 


...... 












BlockKinith 
















" Helper . 












Impr/tvements. . :' .". 


. ... 







■'"■ 








.... 














.... 


Cost Quarrying. ... 








:..■; 












.... 






fjngineer. ■ 

■feeders . 

C'lrl.t un Caul ..'. 






■ ' 




.;;■ 








H'/iler boy 

'Wntchniftn 

Ciiit Mi.iielUuie<>us. 
Total Coal 


::;: 




■..., 




' ' '■ 






CW .M.lliug 









































1 










. 



Q„ar 



III Mill, .: Olhernise Kinplnyed, Total So. 



OUTPUT 

handed • • ■ C'ais . . 



STORAGE 

a l.a Put 111 stock piles ions ill 

.lJ.t " •' ...; " I '■' 



.. Scr. 



3.* 
Scr. 



^.. ll>y.' 



. Clil/SHEl) 
•. J. i.. Quarry i:um ..... 
,;■....■ C'<iii luadx. .: .. 



.Silled Loads. 
Cars. .... 



..Tons ..'...■, 

REMARKS 



Slock. 
. Cars. 



Empties 

Gons. 

. . . Moppsrs 
.... Ballast 



Pig. 2.— Daily Quarry Report. 



Camps and Commissaries 1 1 3 



THE OPERATION OF CAMPS AND COMMISSARIES. 

SY A. O. DAVISON. 

^T^ HE qllestio^ of operation of boarding camps and com- 
missaries in connection with construction work is 



1 



one of very great interest to contractors and one 
that should receive considerable thought and attention. On 
work of large proportions^, where a great many men are em- 
ployed, the operation of camps and commissaries is one that 
requires the attention of a competent manager and assistants, 
whether the camp is run with the expectation of showing a 
profit or simply with the idea of paying operating expenses. 
The first consideration in this is the proper location for the 
camp, which should combine the best sanitary conditions and 
convenience to the site of the work. 

Commissaries or Stores. 

The commissary or store should be built in connection with 
or adjacent to the office and should not be a poorly constructed 
building. It should be built weatherproof to obviate the loss 
of any perishable goods from rain or from extremely cold 
weather. The building should be of sufficient size, propor- 
tioned to the size of the job, to easily accommodate and prop- 
erly arrange the quantities and different character of goods 
necessary to be carried. It should be supplied with sufficient 
shelving, bins and storage room, so that goods can be properly 
arranged and easily accessible. The store or commissar}^ on 
construction work should not be arranged as a general store 
for the public, but should be completely fenced off, preferably 
at one end with a counter, preventing men from congregating 
in that part of the building where the supplies are kept. There 
should be sufficient space and proper entrances to accommo- 
date the number that may call to be waited on during the 



114 Practical Talks on Contracting 

morning, noon hour and after work. The man in charge of 
the commissary and camps sho'uld have his office and sleeping 
quarters in or directly connected with the commissary build- 
ing, and if the contract is sufficiently large he should have 
proper assistants in the store for waiting on the men with 
facility and dispatch. The manager should be a man familiar 
with general store work, should be thoroughly posted on prices 
of such articles as it is necessary to carry, and should be 
required to make requisitions or orders in writing for every- 
thing purchased, a copy of which should be kept on file in the 
main office. When invoices are received for goods purchased 
they should go directly to the office, and when the goods are 
received they should be checked by the man in the commissary 
or his assistants and listed in detail in a receiving book to- 
gether with the name of the parties from whom purchased, 
which book should be turned into the office at proper intervals 
from which to check the invoices. The commissary clerk should 
keep a day book, in which is shown a record of each sale made, 
together with the name and number of the workman to whom 
such sale is made. This book should be in the form of a 
journal, or similar to it, one column of which should be used 
for cash sales and the other for sales which are to be deducted 
on the payroll. In addition to this he should keep an indi- 
vidual ledger, devoting sufficient space to each workman in this 
book in which to post daily the record from his day book of 
all amounts which are charged to the men and which are to be 
deducted on the payroll. 

The cash sales should be posted daily in a ledger for this 
purpose and checked each day against the amount of cash 
received. 

When supplies are received the commissary man should 
refer to the invoice to check prices and extensions, and where 
there are freight charges in addition he should take this into 
account, as well as the cost for hauling, if such is necessary, 
and arrive accurately at the cost of the goods delivered at the 
store, to which amount should added the proper percentage 



Camps and Commissaries 115 

to cover the expense of store operations, and, of course, in 
cases where the contractor is running his store for profit and 
not with the intention of merely defraying expenses, an addi- 
tional per cent should be added to make the selling price such 
that he can realize the profit he has figured his commissary 
should pay. 

The commissary man should also have charge of the issu- 
ing of all supplies to the cook camp, and this should be done 
on requisition only, which requisition should be made out by 
the cook and a copy furnished the general office. These requi- 
sitions should be carefully preserved and at the end of the 
month the total amount of supplies furnished the dining 
camp should be made up from such requisition and credit 
allowed the store for all such supplies turned over to the din- 
ing camp and this amount charged to them. In making this 
entry no profit should be figured, but the dining camp should 
be charged with the supplies they use at the cost of same in 
the store. In other words, the store should be used as a clear- 
ing house or warehouse for dining room supplies to the extent 
of supplies used by them, and they should be billed out to the 
dining room at cost to enable the contractor to determine 
whether or not the price he is charging for board is sufficient 
to pay operating expenses of the dining room or whether a 
profit is shown, if he desires to make a profit from this source. 
In this way he will have his dining room expense so sepa- 
rated that he can rearrange the price for board, or decrease or 
increase the quantity or quality of the meals furnished to 
keep the dining room operation down to the basis which he 
has figured to operate it. 

Sleeping Camps. 

The question of sleeping camps should be carefully consid- 
ered and the buildings located and erected in the best places 
and manner conducive to the health of the men. Separate 
sleeping quarters should be provided for foremen, and the 
equipment for such camps should consist of single wire cots. 



116 Practical Talks on Contracting 

good mattresses, pillows and proper covering, such as sheets, 
blankets, etc. It is desirable to fit up a foremen's camp with 
rooms partitioned off for possibly two or three men to the 
room, and these should be of sufficient size to be comfortable 
and allow them room for trunks, clothing, etc. In the fore- 
men's camps it is well also to have a general living room, 
where the foremen can congregate without being required to 
go to their individual rooms. This camp should be made as 
comfortable as possible under prevailing conditions, so it will 
be homelike and give them an opportunity to fix it according 
to their own fancies. It should be equipped with proper facil- 
ities for washing, and, where possible, for bathing. 

The matter of sleeping camps depends largely on the class 
of labor emplo3'ed, and these camps should be built and equip- 
ped according to classes who will occupy them. In some in- 
stances, where the laborers are of a class to make it necessary, 
their quarters should be equipped after the order of the fore- 
men's camps, although it is not usualh' necessary to partition 
the rooms, but they should be so built and arranged that the 
men will not be crowded, but have room for their baggage, 
clothing, etc., and in all cases they should be well ventilated 
and arranged for comfort. Depending on the number and sizes 
of the sleeping quarters, a man or men should be employed 
under the direction of the camp manager, and his or their 
duties should be to see that the sleeping quarters are kept 
clean, beds regularly and properly made up, and that all 
things in connection therewith are kept in the best possible 
condition that circumstances will permit. Where the number 
of men occupying sleeping quarters on a job is not sufficient 
to require the services of a man to properly take care of the 
bunks and houses, this duty should be performed by the helper 
or helpers in the dining room or the assistants in the store. 
Eequirements, of course, along these lines should be entirely 
governed by the number of men required and a proper ar- 
rangement of their work to handle all parts of it properly and 
at the lowest cost consistent with best results. 



Camps and Commissaries 117 

Dining Room and Kitchen. 

The dining room and kitchen should be built with a view 
to accommodating the required number of men to good ad- 
vantage. The kitchen should be so arranged that it can be 
kept perfectty clean and the man in charge should see that 
this is done. The equipment for the kitchen should, of course, 
consist of range or ranges and proper cooking utensils to ac- 
commodate the number of men which it wdll be necessary to 
feed. The dining room should be equipped with a view 
to cleanliness and the tables should be substantially built 
and covered with white oilcloth, which presents a neat ap- 
pearance and is easily kept clean. Benches should be used, 
as they are more convenient and economical in seating capac- 
ity at the table. It is usually better to have a table especially 
for the foremen. By doing this and arranging separate sleep- 
ing quarters for them it permits them to keep themselves 
more apart from the men and thereby allows them to retain 
and exercise the authority they should have, which is lost 
more or less when they are compelled to sleep and eat directly 
in connection with the men under them. 

The best and most economical equipment for the dining 
room is white enameled ware, which is easily kept clean and 
readily shows if not clean and is economical from the fact 
that it is not easily destroyed. The kitchen should, in hot 
weather, be provided with an ice box or refrigerator to proper- 
ly keep meats and perishable vegetables, butter, milk, etc. The 
contractor should at all times strive to furnish his men with 
good and wholesome, well-cooked, substantial food, consisting 
of good meats, vegetables, butter, and in fact, the class of food 
that is required by men from whom they expect to get an 
honest day's w^ork. 

Provision for Colored and Foreign Labor. 

To refer again to the matter of sleeping quarters, the 
arrangement and equipment of such quarters, as stated above, 
depends on the class and nationality of the men who are to 



118 Practical Talks on Contracting 

occupy same. In the case of the better class of laborers it is 
usually advisable to equip the sleeping quarters with cots or 
beds. In the case of colored labor, if same are employed on 
a job where white labor is also employed, and sleeping quarters 
are furnished for them, they should be removed from the 
quarters occupied by the white men, and in the equipment of 
these camps bunks can be built, in place of supplying cots 
and beds. They should be made comfortable and not com- 
pletely boxed in to cut off the air, and where it is necessary 
to economize space, they can be built double deck, but so ar- 
ranged that the upper berth is not too high up, and in all 
cases the sleeping quarters should be roomy, well ventilated 
and kept in a thoroughly sanitary condition, as the health of 
the men should be carefully considered and looked after to 
enable the contractor to keep a permanent and steady gang on 
the job. 

In reference to dining quarters for colored men, if em- 
ployed, it is best and most advisable to allow them to run their 
own eating establishment, and where the commissary or store 
is maintained by the contractor allow them to purchase their 
supplies for this purpose. 

In the case foreign labor being employed it is not, in most 
cases, advisable to make any attempt to furnish their sleeping 
quarters or any equipment therefor. It is, however, profitable 
and essential to the contractor, as a rule, to build a number 
of small shacks, to be occupied by foreign laborers at a nom- 
inal monthly rental. These shacks should preferably be of 
a size to accommodate four or five men, for which a rental of 
$1 per month per head should be charged. A building of this 
kind can be erected for $40 or $50, and if occupied at the 
rental suggested above will soon pay for itself. 

The question of dining room for foreign laborers is, as a 
rule, not to be considered in connection with the boarding 
camp. They will invariably form their own messes, and each 
shack will prepare their own meals. Of course, the buying 



Camps and Commissaries 119 

of supplies from the commissary will apply in this case, as 
suggested in the case of the negro laborers. 

The Camp Staff. 

The management of a camp outfit should consist of the 
following: One man with sufficient ability to attend to the 
entire management, ordering of supplies, issuing of same to 
the dining camp, and having entire charge of all men em- 
ployed for the proper handling of this branch of the work, 
should be secured. A man capable of these duties can be had 
at from $65 to $75 per month and board. He should be re- 
quired to attend to the commissary or store individually in 
connection with his other duties, and, if this part of the work 
requires it, he should be furnished with one or more assistants, 
as the occasion demands, which assistants should be bright 
young men, who are capable of keeping proper records of 
sales; a person for this position can be had at about $25 per 
month and board. For the operation of the dining room and 
kitchen a competent cook should be employed, and, if neces- 
sary, furnished with sufficient assistants in the kitchen to 
properly handle the number of men who occupy the camps 
and are fed by the contractor. Such a man can be had at from 
$60 to $70 per month and board. Proper assistants should be 
employed for waiting on the tables, keeping the dining room 
in proper condition, washing dishes, etc. Such parties can be 
had at about $25 per month and board. If the camp is suffi- 
ciently large, additional assistants should be employed to look 
after the sleeping quarters, seeing that they are kept clean, 
beds made up and water for washing purposes constantly on 
hand. However, if the camp is not large enough to occupy 
the entire time of a man for this purpose these duties should 
be performed by the cook^s helpers and the helpers in the 
store. 

In regard to requiring all men to occupy sleeping quarters 
and board in the camp, it is, as a rule, not advisable to make 
such a rule imperative. If the sleeping quarters are kept 



120 Practical Talks on Contracting 

properly and the food and cooking up to the standard, there 
will be very little trouble in regard to the men not boarding 
in the camps. However, if there are convenient places where 
the men can secure rooms to themselves and board equally as 
good or better than that furnished in the camps it should be 
their privilege to board on the outside, and, in cases where 
men are boarding with outside parties, it is usually advisable 
and beneficial for the work to protect the boarding house 
keepers and make deductions for them on the payrolls. The 
principal thing in connection with this part of the work is to 
have all the men thoroughly satisfied with their accommoda- 
tions, and, if they find such accommodations better in the 
camp, they will stay. If the accommodations are better on the 
outside, and they are not permitted to avail themselves of 
them by being required to remain in the camps, they will, in 
many instances, leave the work and to a certain extent demor- 
alize the gang by so doing ; or, if they remain, they will cause 
more or less dissatisfaction among the other men by constant 
complaining. 

In reference to the method of operating a camp in connec- 
tion with the work with the idea of operating same for profit 
or simply to defray expenses, would say that the contractor, 
if he has properly figured his work and made his estimates 
right, which will enable him to make money from the work, 
should not operate his camps with any idea of a profit from 
this source, but they should be operated on the basis of defray- 
ing expenses and with the idea of promoting the welfare of 
his employes. He should make his charges for the supplies 
sold to the men from his store and his charge for board suffi- 
cient to cover all of liis expenses, including, of course, the 
buildings necessary for the operation of such camps ; but when 
a contractor finds it necessary to demand that his men board 
in his camps and buy their supplies from the commissary, 
and he is running such camps with an idea of additional 
profit, he should quit the contracting business and join the 
"Bleecker Street Gang'' or go into the hotel business. The 



Camps and Commissaries 121 

contractor should, out of consideration for his men, operate 
his camps for their benefit, and in so doing he will be able to 
keep a better class of mechanics and laborers than he would 
if he is endeavoring to make his profit out of his employes 
instead of from his actual contract work by charging them 
exorbitant prices for board and commissary supplies and in 
endeavoring, in this w^ay, to get back all, or most all, of their 
wage earnings. 

It has been the writer's experience in actual operations of 
camps in connection with construction work that it is more 
satisfactory to sublet the camp end of it, where the work is 
isolated so as to make the maintenance of a camp necessary, or 
where there are sufficient facilities convenient for taking care 
of the men to allow them to secure their own boarding places ; 
to protect the boarding house keeper or the subcontractor by 
making all payroll deduction for them. The extra amount 
of clerical work to properly handle a camp is very great and, 
as a rule, when all expenses are taken into consideration, to 
even operate a camp with the object of paying expenses, the 
cost to the men is often greater than that for which they 
could secure the same or better accommodations on the out- 
side. If the location of the work is such that it is necessary 
to maintain a camp the party operating it should be required, 
by contract, to properly feed the men and care for their sleep- 
ing quarters and also carry a stock of the necessary clothing 
and supplies which the men will require on the work. The 
contract with the party operating such a camp and commis- 
sary should specify the rate to be charged for board and lodg- 
ing and also the price of the principal articles required to be 
carried in the store, and notices posted for the benefit of the 
men so that they may know what they are expected to pay. 
The boarding house contractor or his clerk should confer as 
often as necessary with the timekeeper to prevent any of the 
men securing board or supplies when they are not actually 
on the payroll or after they are laid off or discharged. 



122 Practical Talks on Contracting 



HOW CONTEACTOES USE PHOTOGEAPHY. 

BY E. S. HANSON. 

PHOTOGEAPHY long posed as an art, and held itself 
aloof from the commonplace things of everyday work. 
It was glad to reproduce a beautiful face; and it 
might, for a consideration, attempt to lend charm to one less 
lovely. He rejoiced in a pleasing landscape — this old-time 
artist for art's sake; but he would take offense if asked to 
photograph the same piece of country when torn by the con- 
struction of a railroad or the building of a viaduct. 

The photographer of the artistic temperament is still with 
us, his art more highly developed than ever ; but there has also 
rapidly sprung up the commercial photographer, who takes 
pictures because of their utility rather than their beauty. And 
in no line is the commercial photographer more in demand 
than by the engineers and contractors who are carrying out 
the vast constructive enterprises of the day. 

To these men, who are accustomed to handling reports, 
and drawings, and profiles, and blue prints, from one end of 
the day to the other, it is a positive relief to have a superin- 
tendent send in along with his report a photograph of the 
work as it actually stands when the report is made. And then, 
too, it verifies the report. Even the superintendent with the 
best of intentions is likely, at times when the work has 
dragged, to convey the idea in a written report that more has 
been done than is actually the case. A photograph can- 
not very readily be made even to imply an untruth. And 
more; if the superintendent knows that a photograph must 
be taken at a certain time, he will put forth his best efforts 
in order that it shall show as great an amount of progress as 
possible. 

One of the higher refinements of photographic work has 



How Contractors Use Photography 123 

been worked out by one of the engineers of The Arnold Com- 
pany, Chicago, in connection with the construction of the 
shops of the St. Louis & San Francisco Railroad, at Spring- 
field, Mo. Here, instead of a hit-and-miss system of taking 
anything which seemed to be of value from any desired point, 
the company established four points on the job from which all 
views were taken. 

The ground on which the shops were located is a rec- 
tangular piece about forty acres in extent, and having a con- 
siderable diagonal slope. At each corner of the rectangle a 
substantial but inexpensive tower was erected, the four of 
varying heights above the surface of the ground, but all of 
them uniformly thirty feet above the grade on which the 
buildings were to be placed. The buildings were to be sixty 
feet high, so that a camera placed on any one of the towers 
would cover the buildings without distortion. 

A point was established on each one of these towers, and 
an arrow of direction. The photographer was required to ad- 
just his camera to these each time an exposure was made, al- 
most as accurately as a surveyor would adjust an instrument 
in striking a line. These stations were lettered A, B, C, D, 
and this letter put on the negative in connection with the 
serial number. These photographs, taken from the same iden- 
tical points each time, enable one to see the building grow 
before his very eyes, almost like the film of a moving picture 
machine. In addition to the views taken from the towers, 
detail photographs were also taken of important parts of the 
construction. 

Views Taken at Regular Intervals. 

This company on all its work takes photographs at uni- 
form intervals of two weeks. These are all made in a uniform 
size of 8x10 inches, and together with progress blue prints of 
the same size they are fastened with e3'elets in a heav}^ paper 
cover. These covers have printed on the outside the name of 
the job, date, etc. 



124 Practical Talks on Contracting 

Several sets are made up for each date. The covers are 
printed in quantities, the printer changing the date for each 
set. One of these sets is kept in the files of the main office, 
and one set at the office on the work. One set is also sent to 
the person for whom the work is being executed, or to each 
of them if there are more than one. A few are kept on hand 
for emergency and to show to prospective clients. 

A contract is made with a local photographer in each place 
where work is to be prosecuted. This contract specifies the 
exact size plates and prints are to be, color, style of finish and 
mounting, price for plate, and price for prints. The plates in 
all cases remain the property of the company and the pho- 
tographer is not allowed to sell copies without permission. 
This is readily granted in most cases, however, and brings an 
added income to the photographer. He is also allowed to 
place his imprint on the back of each photo, so that an ad- 
vantageous rate can usually be secured. 

Where photographs are 8x10 inches or larger, most con- 
tractors prefer to have them mounted on muslin, with a hinge 
and extension for binding. Sometimes this is done on the 
smaller sizes, though these are more frequently printed on 
ordinary paper and mounted in an album, such as can be se- 
cured of almost any dealer in photographic supplies. 

The completeness of Gilbreth's "Field System" is well 
illustrated by the fact that it contains an elaborate set of 
special rules governing the making and disposition of photo- 
graphs in connection with the construction work of the or- 
ganization. With the increasing use of photographic material 
for office use and reference, for purposes of record, both 
routine and for possible legal protection, a considerable prob- 
lem has arisen with regard to handling photographs taken by 
many different men, on many different jobs and in many 
different states. 



How Contractors Use Photography 125 

Details of Gilbreth Method. 

The metliod in use by the Gilbreth organization has long 
since proved its efficacy and is best explained by quoting ver- 
batim some of the rules taken from the "Field System'' men- 
tioned above. The uses of photographs other than their merely 
casual and incidental application, are stated as follows: 

For keeping office employes in touch with the varying 
conditions which from time to time obtain on the various 
jobs. 

For indisputable records of the condition of adjoining 
buildings before starting work and after its completion. 

Photographing cracks over doors and windows and in 
other places, to show whether or not any settlement has taken 
place, due to the construction work involved. 

For records to be available in case of a law suit or other 
discord or misunderstanding. 

For advertising purposes. 

Various other rules, as follows, indicate the methods of 
procedure in photographing, which have been found to be 
most advantageous in obtaining the pictorial record desired: 

In all cases pictures should be taken of the men while at 
work and not as though idle and posing for a picture. On out- 
of-town work prints should be mailed to the New York office, 
and the negatives expressed promptly to the regular photog- 
rapher employed by the firm. All negatives should be dated 
and numbered. Prints should be unmounted and Velox paper 
should be used for all prints. The notation to be used on all 
photographs is as follows; the proper contract number, serial 
number and date being inserted in the place indicated : 

By the regular photographer: A 31 — 32 — 5/16/06; by 
the employes on the job, when taking photographs which are 
developed before going to the regular photographer: A 29 — J 
32—4/20/07 ; by special inspector or others : A 28 — B 21— 
5/20/06. Photographs should be marked in no other way. 
If possible keep all outsiders out of the picture. As soon as a 
film is taken, mark on the outside of the wrapper that sur- 
rounds it the contract number, the date on which the picture 
was taken, and the name of the person taking the picture, 
sending the film, thoroughl}^ wrapped up so as to exclude the 
light, to the regular photographer. Special stress is laid on 



126 Practical Talks on Contracting 

the advisability of obtaining photographs of conditions at the 
time of any accident. Unless otherwise directed, at least one 
roll of films should be taken on each job, each week, and all 
pictures on that film should be taken the same day. 

These pictures show in detail how the forms were made, 
even to the numbering on the forms. They show as well the 
construction of the columns, which splice plates were riveted 
in the shop and which were riveted in the field, and the con- 
ditions of staging and its proximity to the adjoining struc- 
tures. Some of the columns shown in the Gilbreth photo- 
graphic files were 7^ tons in weight and by means of such 
photographs it is accurately shown how long the columns 
rested on the ground before being set in place. They also 
show the condition of the work and, consequently, whether or 
not the contractor was able to take care of these columns im- 
mediately upon delivery. 

In its working application, the Gilbreth method of pho- 
tographic record has been found, through its check upon the 
work of the employes, to prevent damage to owners, to ad- 
joining property, and to the contractor's interests and to pre- 
vent legal disputes, as well as furnishing the data necessary to 
settle them without delay. 

Many engineers and contractors require two classes of 
photographs to be taken on all pieces of work: Construction 
photographs, which are kept for record of the method and 
progress of the work, and what may be termed "publicity 
photographs," kept for showing the class of work the firm is 
engaged in, thus influencing prospective clients, and for ad- 
vertising purposes. Among the firms following this method 
are Dodge & Day, of Philadelphia, one of whose engineers 
thus described their system: 

"Each of our superintendents of construction is provided 
with a film camera taking a photograph 4x5 inches. At 
regular intervals photographs of the work in progress are 
made, a placard giving name of client and date having been 
placed on the work. The film is returned to this office and 



How Contractors Use Photography 127 

two prints of each negative are made by our photographic de- 
partment. The films are kept on record in that department, 
consecutive numbers being given to each plate, regardless of 
what job it comes from. Each job is given a letter, which 
is prefixed to the number. One print is kept at this office 
and one print is sent to the superintendent on the work. The 
print in the office is properly filed under the letter and date, 
in a cover provided for that purpose. 

"The publicity photographs are taken on 8x10 inch size 
by our regular photographer, at such intervals during the 
course of work as will insure interesting pictures. These 
plates are given consecutive numbers and a blue print of each 
plate is kept on permanent file in this office. These plates 
are available for advertising cuts and any time that a pro- 
spective client may be particularly interested in some special 
phase of our work, blue prints from the plates, covering the 
point of interest, are sent him." 

Practically the same system is followed by the Aberthaw 
Construction Company, of Boston, as well as J. G. White & 
Co., of JSTew York. A representative of the construction de- 
partment of the latter organization says that in connection 
with tabulated and graphical reports on progress, photographs 
play an important part in their home office reports. 

"Whereas many concerns have a traveling photographer 
who periodically visits each contract," he says, "we have, for 
various reason, found it more desirable to supply each local 
office with a suitable camera and outfit complete for supplying 
negatives to the home office. These negatives are carefully in- 
spected by the supervising engineer in charge of the respective 
job and are then carefully numbered and filed after one print 
has been taken for the progress photograph folio. On each 
print appears the serial number of the negative, the name of 
the contract, date when exposure was made, and a short de- 
scription of the subject. 

"Fortunately, to date we have not been forced to resort 
to any of these progress photographs for settling disputes in 



128 Practical Talks on Contracting 

court or elsewhere^ the primar}- end being to keep the home 
office advised as to the progress of the work, and, in a measure, 
for publicity purposes/^ 

Eelative to the last statement quoted above, it is some- 
times pointed out, however, that these photogi'aphic records 
often act as a sort of police power in the prevention of liti- 
gation. The knowledge on the part of a sub-contractor that 
the general contractor has dated photographs of the w^ork on 
which he has been employed, will tend to discourage the 
presenting of unjust claims. Cases of dispute which have 
come up, and which would otherwise have gone to court, have 
been satisfactorily settled when the photographic records were 
referred to. 

If a company employs its own photographer, there is an 
advantage in having a man who has some knowledge of en- 
gineering. In fact, by some concerns an insight into engineer- 
ing problems is considered of more value than an expert 
knowledge of photography. For securing its photograpliic 
records George W. Jackson Inc. of Chicago has in its employ 
a man of some technical training who is an amateur pho- 
tographer. He is engaged continually in visiting the different 
pieces of work which the company has in hand, and in addi- 
tion to the photographs which he takes he is able to report 
on any features of particular interest, or answer intelligently 
any questions which the pictures may suggest to the engineers 
of the company. Each piece of work is visited about once in 
two days. The photographer immediately develops his plates 
and makes prints on developing paper, so that when Mr. Jack- 
son comes to his office each morning he finds on his desk a 
photographic representation of a large part of the work as it 
looked the day before. 

A photograph will show, for instance, broken boilers which 
have come to the job. These were photographed on the car 
just as they arrived at the work. Such a picture is often of 
great assistance in securing an adjustment of claims against a 
manufacturer or transportation company. 



^^F 16 191^ 



One copy del. to Cat. Div. 



Ifi 18 ?f 



